Tariffs Could Still Go Up From Here: Commerce Secretary Lutnick (Full Interview)

Commerce Secretary Howard Lutnick says that foreign nations will need to address a host of regulatory and other policies limiting imports of American products in order to secure relief from President Donald Trump’s new reciprocal levies.

“These non-tariff trade barriers, they are the monster that needs to be slayed,” Lutnick said in an interview on Bloomberg Television and Radio. “Our teams are talking to all the great trading partners today,” he said. “It is time for them to do deep soul searching on how they treat us poorly and how to make it right.”

Offering specific examples of non-tariff barriers, the Commerce chief said that in the European Union some countries use the region’s 20% value-added tax to subsidize their own manufacturers’ production.

Economists at the Council for Economic Advisers and staff at the US Trade Representative’s office have pored over foreign nations’ trade barriers for decades, and that analysis formed the basis for the levies Trump announced Wednesday, Lutnick said.

He also offered an example of a 2012 trade deal with South Korea which involved the US letting Korean cars into its market, with Seoul agreeing to import American agricultural products. Nevertheless, McDonald’s Corp. was unable to bring in french fries, because it was deemed not to have shown the origin of the potatoes, he said.

“You don’t understand the scale and depth of how they keep our products out,” Lutnick said.

Asked about the sell-off in equities since Trump unveiled the reciprocal tariffs Wednesday afternoon, Lutnick said the president’s focus is on addressing “the economic pain that the United States of America suffered over decades.”

S&P 500 futures were down 3.6% as of 8:52 a.m. in New York, while the Bloomberg Dollar Spot Index fell 1.8% — to the lowest level since October.

The Commerce chief also confirmed that the new 34% surtax on China stacks on top of previous levies, including the 20% Trump imposed earlier this year over the alleged Chinese production of precursors for illegal fentanyl.

“All they have to have is a phone call from President Xi to Trump saying we’re going to stop fentanyl production,” Lutnick said, putting the onus on President Xi Jinping. “And it would drop 20%,” he said of the tariff rate.

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