U.S. Commerce Secretary Wilbur Ross said there’s too much “hysteria” among investors about the risks to the economy of President Donald Trump’s trade policy, arguing higher tariffs will have a trivial effect on the nation’s rate of inflation.
“I would recommend that investors act rationally, and by that I mean judge this administration by the actual performance that it creates,” Ross said Thursday in an interview with Bloomberg Television’s Julia Chatterley. “Don’t judge it by some sort of hallucination about some sort of bogeyman out there that could be a problem. I think people are altogether too hysterical and I think that calmness is a much more useful investment tool than hysteria.”
Earlier Thursday in Beijing, Commerce Ministry spokesman Gao Feng said China won’t submit to unilaterally coerced negotiations and doesn’t rule out any options to defend its interests. U.S. tariffs set a bad precedent and cast a shadow on the global economy, he said at a briefing, and reiterated that Beijing hopes the U.S. will solve disputes via dialogue.
Beer Can
Ross said separate tariffs on steel and aluminum won’t raise prices that much for consumers. “You’re talking about a fraction of a penny on a can of beer,” he said. “The total amount of the tariffs, if you assume they’re fully passed through to our economy, it’s something under one half of one percent. Big deal. This economy is not so fragile that a fraction of a percent is going to upset either the market or the economy.”
U.S. stocks fell sharply after Trump announced his plans to slap tariffs on Chinese imports on March 22. The S&P 500 index recovered Monday, but is down 1.5 percent since the day of the announcement.
“Rational investors work with the numbers and try to think through what are the real implications, not what is some wild fantasy,” Ross said.
