Sen. John Kennedy (R-La.) was stunned by Commerce Secretary Howard Lutnick responses to his question on Wednesday that appeared to undercut the Trump administration’s justification for starting a global trade war.
At a Senate Appropriations Committee hearing on Wednesday, Kennedy pressed Lutnick on whether the administration is really seeking “reciprocity” in trade after the cabinet secretary suggested otherwise.
“If Vietnam, for example, came to you tomorrow and said, okay, Mr. Secretary, you win, we’re going to remove all tariffs and all trade barriers. Would the United States please do the same? Would you accept that deal?” Kennedy asked.
“Absolutely not. Absolutely not,” Lutnick replied. “That would be the silliest thing we could do.”
“Why is that?” Kennedy asked.
“Vietnam has $125 billion in exports to us and only $12.5 million in imports from us,” Lutnick explained. “Where do they get it from? They buy $90 billion from China, then they mark it up and send it to us. They’re just a way for China to export to us through Vietnam.”
“You wouldn’t accept that deal?” Kennedy repeated.
“No, it’s a terrible deal. We’re the one with the money. We’re the one with the store,” Lutnick responded.
Kennedy then asked for clarification on the Trump administration’s trade policy given that their stated goal since Trump announced ‘reciprocal tariffs’ in April was for other countries to lower trade barriers to the United States.
“What’s the purpose of reciprocity, then? Is reciprocity not one of your goals? Are you telling the President that we shouldn’t seek reciprocity if that’s what you’re telling him? Why are you trying to do these trade deals?” a stunned Kennedy asked.
“What do we want? We want to encourage Vietnam to produce products,” Lutnick said. “They’re great at producing.”
“But I want to get back to reciprocity,” the senator said. “You just said you don’t believe in it. You don’t accept reciprocity as a goal. What are you negotiating in these trade deals?”
“Why would we open our bank account..?” Lutnick began before Kennedy interrupted him to ask, “why are you negotiating trade deals?”
“You’re trying to get other countries to lower their tariffs and trade barriers in return for us lowering ours!” he insisted.
“That’s true—for the things they’ll take from us,” Lutnick said.
“That’s called reciprocity,” Kennedy said as Lutnick agreed saying “of course.”
“So are you or are you not seeking reciprocity in these trade deals?” Kennedy pressed.
“We are absolutely seeking reciprocity with respect to things that can be reciprocal,” Lutnick answered.
“You just said that if a country came to you and offered you the ultimate reciprocity, no tariffs, no trade barriers in return for us doing the same, you would reject that,” Kennedy fired back.
“Of course, because they buy from China and send it to us,” Lutnick replied.
Asked whether Trump administration would accept a deal with Vietnam if they decided not to buy from China, Lutnick said they would “consider it.”
“There are certain products we want to reshore. We don’t want other people making them,” he added. “We want to make pharmaceuticals here. We need to protect ourselves.”
