- The anti-tax crusader says he hopes Trump is only threatening tariffs as a negotiating ploy to forge better trade deals.
- "We have a great deal of leverage. And we need to use it wisely," warns Norquist.
- Trump signals he may drop the tariffs — at least for Canada and Mexico — in exchange for a "fair" NAFTA deal.
Anti-tax crusader Grover Norquist told CNBC on Monday he hopes President Donald Trump is only threatening steel and aluminum tariffs as a negotiating ploy to forge better trade deals for the United States.
"We have a great deal of leverage. And we need to use it wisely," warned the founder and president of Americans for Tax Reform. "There is something to be said for … rattling the cages and disrupting things."
In a "Squawk Box" interview, Norquist said Trump was successful in strong-arming Republican leaders who did not want to go as low with the corporate tax rate. "[Trump] wanted a 15 percent corporate rate. We got 21. I don't think we would have gotten 21, down from 35, if he didn't say 15."
But Norquist warned the president not to overplay his hand on trade. "This can get carried away. This is a war of choice like Iraq. Trade wars are wars of choice [that] you didn't have to do."
Norquist also reiterated what he tweeted over the weekend, saying "trade wars are civil wars" with only Americans getting hurt.
The U.S. certainly needs more favorable trade deals, Norquist told CNBC, but he warned that singularly "throwing a punch" of tariffs of 25 percent on steel and 10 percent on aluminum does not help "because we're not in charge of how the rest of the world reacts."
Sticking to his anti-tax argument, Norquist argued that "tariffs are taxes" and they are "very disruptive." His group is a powerful force in conservative politics that pushes legislators and political candidates to sign its Taxpayer Protection Pledge, a written promise to oppose any efforts to increase income taxes for working Americans and U.S. businesses.
The stock market tanked last week after Trump announced the tariffs on Thursday, and U.S. stock futures were lower in Monday's premarket.
Trump's early Monday tweets signaling he may drop the tariffs — at least for Canada and Mexico — in exchange for what he calls a "fair" NAFTA deal did not break stocks out of their defensive posture. The U.S., Canada, and Mexico are currently struggling to renegotiate the 1994 North American Free Trade Agreement.
In a separate CNBC interview on Monday, Carlos Gutierrez, who served as President George W. Bush's Commerce secretary from 2005 to 2009, said tariffs can't save the dying the steel and aluminum industries.
Before Gutierrez's time at Commerce, Bush tried steel tariffs of as much as 30 percent on imports in 2002. But the levies were quickly lifted — less than two years into a planned three-year run — because of threats of retaliation from European trading partners.