White House economic advisor Larry Kudlow on Friday attempted to calm fears of a trade war, saying retaliatory measures taken by U.S. allies aren’t major and are more like a squabble among family members.
“This is something of a family disagreement,” Kudlow said Friday in an interview with CNBC’s “Squawk on the Street.” “It’s a trade discussion. It’s not a trade war. We can fix this, but we’re going to need the help of our friends.”
The Trump administration decided Thursday to impose tariffs of 25 percent on steel imports and 10 percent on aluminum imports from Canada, Mexico, and the European Union. The three U.S. allies quickly announced retaliatory measures.
Stocks fell Thursday, with the Dow Jones industrial average falling more than 250 points, on fears of a possible trade war. (The Dow on Friday was recovering nearly all of those losses on the strong May jobs report.)
President Donald Trump in March picked Kudlow to succeed Gary Cohn as director of his National Economic Council. Cohn, a former No. 2 executive at Goldman Sachs, resigned from the White House role shortly after losing his fight to persuade the president not to impose those steel and aluminum tariffs.
The steel and aluminum tariffs were originally announced by Trump on March 1. Shortly after, the EU, Canada, and Mexico were given temporary waivers, which the president decided not to extend.
Commerce Secretary Wilbur Ross defended the tariffs on Thursday, telling CNBC the stock market will “adjust” to any changes in U.S. trade policies. He also said that ending the tariff relief on Canada and Mexico reflects the lack of progress in the NAFTA talks.
Kudlow spoke after the Bureau of Labor Statistics better-than-expected jobs report, which showed the U.S. economy continued to add jobs in May, with nonfarm payrolls up 223,000.That was higher than the growth of 188,000 positions that economists had expected.
Kudlow, who said he believes that the U.S. economy has “entered into the longest prosperity in a couple of decades,” also said European leaders should adopt Trump-like policies to wake-up their economies.
“If they do, they will come out of their doldrums and they’ll get the kind of capital investment and business investment that generates prosperity for jobs and wages,” he said.