- Larry Kudlow argues that President Donald Trump should not be blamed for trade tensions with key American allies.
- Trump heads to Canada this week to meet with allies on whom his administration recently imposed tariffs.
Top White House economic advisor Larry Kudlow contended Wednesday that President Donald Trump should not be held responsible for mounting trade conflicts with American allies, as the president gets set to face world leaders angered by tariffs imposed by the U.S.
"Don't blame Trump. Blame the nations that have broken away" from fair trade practices, he told reporters. The global trade system "is broken and President Trump is trying to fix it. And that's the key point," Kudlow added.
The National Economic Council director downplayed concerns about tensions with key American allies ahead of Trump's trip to Canada at the end of the week for a summit with leaders of the Group of 7 economies. Trump recently imposed tariffs on steel and aluminum imports from countries including the other six members — Canada, France, Germany, Italy, Japan and the United Kingdom — prompting retaliatory measures against the U.S.
The developments have prompted concerns about a trade war that could damage the U.S. economy or cause frayed relations with allies. The tariffs have sparked backlash not only abroad but at home, where Trump is trying to stop an effort from free trade Republicans to push back against the measures. Both U.S. lawmakers and foreign officials have questioned Trump's national security justification for imposing the tariffs.
Ahead of Trump's G-7 meetings, Kudlow, a former CNBC senior contributor, downplayed the prospect of a "trade war" with allies — calling the tensions "disputes that need to be solved." He said he hopes the summit, where Trump will have bilateral talks with Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron, will lead to substantive discussions on trade.
Last week, the Trump administration said it would not exempt Canada, Mexico and the European Union from tariffs on steel and aluminum imports. The decision came as the U.S., Canada and Mexico have faltered in efforts to strike a revised North American Free Trade Agreement.
Trump has long pledged to crack down on what he calls unfair trade practices and bad trade deals. He contends foreign countries had punished U.S. companies and stolen jobs away from American workers — one component of the appeal that carried him to the White House. Ultimately, he wants to increase U.S. exports and reduce trade deficits.
While numerous Republicans who support Trump — and Democrats who typically do not — have backed tough responses to alleged trade abuses by China, the tariffs on the key American allies brought the harshest response yet to Trump's trade actions both domestically and abroad. Trudeau reportedly said he wanted to have "frank" talks with Trump during the G-7 meetings.
Asked whether Trump had damaged relations with Canada, Kudlow answered that he was not worried about temporary tensions.
"I have no doubt the United States and Canada will remain firm friends and allies," Kudlow said.
The White House economic advisor also denied reports that Treasury Secretary Steven Mnuchin pushed for a tariff exemption for Canada during a meeting this week. Kudlow said both he and the Treasury secretary attended the meeting and did not say a word.
The U.S. has also sought help from allies as it tries to reach a deal to reduce trade deficits with China and stop alleged theft of U.S. intellectual property by Chinese companies. The U.S. has reached neither a broad deal with China to avoid potentially damaging tariffs, nor an agreement to revive Chinese telecommunications company ZTE, according to Kudlow.
He said he believes the rest of the world agrees with Trump about Chinese trade practices.