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When Wilbur Ross ran the Commerce Department in President Donald Trump\u2019s first term, tariffs had one job: shrink the trade deficit. Seven years later, he said the president is using them for something else, and that the refunds from the ones the Supreme Court struck down are going to the wrong people.<\/p>\n
\u201cIt\u2019s a whole different picture,\u201d Ross told Fortune. \u201cHe made the decision not just to use the tariffs for purposes of changing the trade deficit. He used them for a variety of other purposes. So it\u2019s a whole different conceptual approach.\u201d <\/p>\n
He called Trump\u2019s second term one filled with \u201ca different objective that he has.\u201d<\/p>\n
Fix the trade balance<\/p>\n
Because importers pay tariffs at the border, they decide whether to absorb the cost or pass it on. In practice, most of it reaches shoppers: Federal Reserve data show American households paid about 90% of the cost of Trump\u2019s second-term tariffs.<\/p>\n
Back during Trump\u2019s first term, Ross\u2019 tariffs came through a 1962 law, Section 232 of the Trade Expansion Act, which allows the president to limit imports that threaten national security. In February 2018, Ross concluded that imported steel and aluminum met that bar and sent his department\u2019s findings to Trump, citing China\u2019s huge steel output. On March 8, Trump placed a 25% tariff on imported steel and a 10% tariff on aluminum, then spent the rest of the year granting and revoking exemptions for individual countries.<\/p>\n
\u201cMy role was to work on trying to fix the trade balance and try to get that drawn into a more sensible balance,\u201d Ross said.<\/p>\n
Trump\u2019s second-term tariffs used a different law, the International Emergency Economic Powers Act, which gives the president wide power over trade during a declared emergency. He used it for tariffs on nearly every trading partner and for tariffs tied to goals well beyond trade, such as a 40% duty on Brazilian imports over the prosecution of former President Jair Bolsonaro.<\/p>\n
Ross said Trump could go further this second time around because he came back with more power.<\/p>\n
\u201cHe was much stronger as he went into the second term than he was when he went into the first term,\u201d Ross said. \u201cFirst term, he did not control the Congress, and he did not really control the Republican Party. Second term, he clearly controlled both, so he was in a position to do more things the way that he wanted to do them.\u201d<\/p>\n
But still, it\u2019s ultimately something the president decides. <\/p>\n
\u201cIt\u2019s not a question for the Commerce Department to decide,\u201d Ross said. \u201cThis was a presidential decision to expand the use of the tariffs.\u201d<\/p>\n
Passing on the tariff refunds<\/p>\n
Following the Supreme Court\u2019s ruling that left the government owing importers about $166 billion, Ross, who in March warned that consumers would be the biggest losers, kept to his messaging and said it\u2019s still questionable if those who paid the price are getting the refunds.<\/p>\n
\u201cI think that there are some serious questions as to whether the right people got the refund,\u201d he said. \u201cLet\u2019s say I\u2019m an importer. I\u2019m the one who wrote the check for the tariff. The chances are that I pass some or all of that along to my customer. If you give me the refund now, I\u2019m actually getting paid more than the money that I laid out, and I\u2019m very surprised that that\u2019s the way that they went about it.\u201d<\/p>\n
Companies are split on what to do with the windfall. UPS and FedEx pledged to return their refunds to customers. Amazon, which reported about $640 million in refunds in the second quarter, has said it may pay back only a limited number of customers. Shoppers filed a class action against the company in May, and its finance chief has said Amazon largely absorbed tariff costs rather than passing them on.<\/p>\n
Ross used Amazon to make his point. <\/p>\n
\u201cLet\u2019s say you\u2019re Amazon, and let\u2019s say you passed on half the tariff to your customer. Why should you get more than half the refund?\u201d he said. \u201cThe customer is the one who ultimately paid it. He didn\u2019t get any refund, and yet he\u2019s the one who paid it.\u201d<\/p>\n
In his view, any importer that passed on part of the cost \u201cpicked up an extra profit as a result of the tariffs,\u201d an outcome he called \u201cconceptually flawed.\u201d<\/p>\n
#Wilbur #Ross #Trumps #firstterm #tariff #hawk #refunds #give #importers #extra #profit<\/p>\n","protected":false},"excerpt":{"rendered":"
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