President Donald Trump’s administration is avoiding trade actions that have been in the works for months to avoid irritating Congress before tax reform passes, CNBC reported Friday.
Over the past several months, the Department of Commerce has held off releasing investigations into Chinese steel dumping, and while the preliminary renegotiations for the North American Free Trade Agreement (NAFTA) are ongoing, Trump has been less vocal about withdrawing from the deal.
“What we don’t want to do is things that will unnecessarily irritate the Senate, because we need the votes there,” Commerce Secretary Wilbur Ross said Friday on CNBC’s “Squawk Box” Friday when co-host Karen Tso asked whether the administration was holding back on promises Trump made during the campaign.
“We need the votes there and as proven with health care, it is a very fragile margin. So, it’s a question of timing more than it is direction,” Ross said.
Republican leadership in Congress hopes to work on tax reform this fall, and has a package ready for consideration, but the path forward is not clear. Most likely, the tax reform Trump wants will need every Republican vote in the Senate.
“The president is not going to be suddenly happy with trade deficits,” Ross said. “He’s not going to be happy with exporting jobs. But the real priority is going to be getting the tax bill through.”
Tax reform should come first, as a tax cut to businesses and individuals will stimulate growth. With the ultimate goal of achieving 3 percent GDP growth, tax reform will be a big boon to the economy. “That extra percentage point of growth is huge,” Ross said. “It’s $10 trillion over 10 years. It’s $3 trillion of more federal revenue. So, it’s a linchpin.”
“It’s a question of timing more than it is direction,” Ross said.
Ross first announced an investigation into China’s potential manipulation of steel prices to control the global market in April, but has not made a final decision on actions.
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