Trump better be careful not overplay his trade hand

Anti-tax crusader Grover Norquist told CNBC on Monday he hopes President Donald Trump is actually only threatening steel in addition to aluminum tariffs as a negotiating ploy to forge better trade deals for the United States.

“We have a great deal of leverage. in addition to we need to use that will wisely,” warned the founder in addition to president of Americans for Tax Reform. “There is actually something to be said for … rattling the cages in addition to 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 might have gotten 21, down via 35, if he didn’t say 15.”

yet Norquist warned the president not to overplay his hand on trade. “This particular can get carried away. This particular is actually a war of choice like Iraq. Trade wars are wars of choice [that will] 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, yet he warned that will singularly “throwing a punch” of tariffs of 25 percent on steel in addition to 10 percent on aluminum does not help “because we’re not in charge of how the rest of the earth reacts.”

Sticking to his anti-tax argument, Norquist argued that will “tariffs are taxes” in addition to they are “very disruptive.” His group is actually a powerful force in conservative politics that will pushes legislators in addition to political candidates to sign its Taxpayer Protection Pledge, a written promise to oppose any efforts to enhance income taxes for working Americans in addition to U.S. businesses.

The stock market tanked last week after Trump announced the tariffs on Thursday, in addition to 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 in addition to Mexico — in exchange for what he calls a “fair” NAFTA deal did not break stocks out of their defensive posture. The U.S., Canada, in addition to 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 via 2005 to 2009, said tariffs can’t save the dying the steel in addition to aluminum industries.

Before Gutierrez’s time at Commerce, Bush tried steel tariffs of as much as 30 percent on imports in 2002. yet the levies were quickly lifted — less than two years into a planned three-year run — because of threats of retaliation via European trading partners.

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