India and China Have Highest Tariffs Yet No Inflation, According to US Commerce Secretary Nominee

During a Senate hearing, Howard William Lutnick, nominated by US President Donald Trump for commerce secretary, argued that tariffs do not cause inflation. He highlighted India and China as examples, noting they have high tariffs but no inflation. "The two top countries with tariffs, India and China, have the most tariffs and no inflation, it is just nonsense that tariffs cause inflation. It is nonsense," he stated.

Lutnick assured lawmakers that the US economy would improve significantly. He explained that while some product prices might rise, it doesn't mean overall inflation will occur. He emphasised that the global trade environment treats the United States unfairly, with higher tariffs and non-tariff barriers imposed by other countries.

Tariffs and Global Trade

He expressed concern over how US farmers are treated globally, stating they face disrespect. "The countries take advantage of American kindness, American gratitude that we used to rebuild the world after the World Wars and after the Korean War and after the Vietnam War. We need that disrespect to end," he said. Lutnick believes tariffs can foster fairness and reciprocity in international trade.

Lutnick also noted President Trump's executive order directing a review of tariffs by the Commerce Department and US Trade Representative (USTR). This review aims to evaluate the long-term tariff model. He mentioned short-term issues like illegal migration and fentanyl entering the US, which have severe consequences.

Reciprocity and Fairness

According to Lutnick, tariffs could help ensure fair treatment for American farmers, ranchers, and fishermen. "I think tariffs are a way to create reciprocity to be treated fairly, to be treated appropriately. It will help our farmers and ranchers and our fishermen to flourish and that’s what I expect this administration is going to drive," he said.

Lutnick stressed the importance of other countries respecting the American economy due to their reliance on it. He expressed his commitment to supporting President Trump in achieving fairness in trade relations. "These countries have the reliance on the American economy and they need to start to respect us now," he added.

The nominee's remarks reflect a broader strategy of using tariffs as a tool for negotiating better trade terms for the United States. By addressing these issues, Lutnick aims to enhance economic conditions domestically while ensuring fair treatment in global markets.