Cancelling NAFTA would be a 'calamitously bad decision', says Trump's new economic adviser

Cancelling NAFTA would be a 'calamitously bad decision', says Trump's new economic adviser
From CBC - March 14, 2018

U.S. President Donald Trump has appointed a blunt-talking booster of trade with Canada as his top economic adviser, giving the northern neighbour a high-profile new advocate at a sensitive moment in Canada-U.S. relations.

Larry Kudlow is pro-NAFTA and anti-tariffand does not mince words in letting people know. The former Wall Street analyst and current cable-TV personality is the new director of the White House National Economic Council, Trump's spokeswoman confirmed Wednesday.

Trump had said he wanted someone whose views would clash with his own nationalist impulses and that's precisely what he's getting. In his commentary, Kudlow has been scathingly critical of protectionist moves like steel tariffs.

His Twitter feed is filled with pro-trade tweets. In one recent radio appearance Kudlow began by criticizing the president's steel and aluminum tariffs, then pivoted into a prediction of economic disaster should Trump cancel NAFTA.

"My greatest fear ... is not the steel thing but that we will walk away from NAFTAwhich I think would be a calamitously bad decision," Kudlow told "The John Batchelor Show" a few days ago.

"It would turn business against the president ... and would, frankly, blow up the whole stock market."

Key debates over NAFTA are likely to unfold over the coming weeks as the White House makes a long-shot effort to wrap up a deal by springand get it ratified by the end of the year.

Kudlow replaces the like-minded Gary Cohn as head of the council. Like his predecessor, he is likely to clash with the more protectionist wing of the White House, embodied by trade adviser Peter Navarro, and the president himself.

A clash of presidential advisers

Previews of the battles ahead came in that radio interview.

Kudlow called U.S. trade czar Robert Lighthizer the "master" of trade-penalty lawslaws Kudlow said make no sense. He also pointed out that the person leading the steel-tariff file for Trump, Wilbur Ross, owned steel companies.

He said the U.S. has all the steel it needs, and should not be punishing its entire economy by setting tariffs to protect a tiny fraction of businesses.

"These (steel producers) want protection. They are not competitive. They are bloated companies," said Kudlow.

"Where you lose me is when you start slapping high tariffs on commodities, which protects these companies. They are very inefficient and we do not have a shortage of them."

Ross has argued that the tariffs are legitimate under national-security law. A 1962 U.S. trade law allows emergency measures under a broad definition of national security, which could be interpreted to mean the country's economic interest.

A 'silly' use of tariffs

Kudlow'sbeen wrong before


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