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Commerce Secretary Ross says 3 percent GDP growth not achievable this year

May 09,2017 23:20

WASHINGTON The U.S. economy won't achieve the Trump administration's 3 percent growth goal this year and not until all of its tax, regulatory, trade and energy policies are fully in place, Commerce Secretary Wilbur Ross said on Tuesday. The GDP target ...and more »

By David Lawder and Jennifer Ablan | WASHINGTON
WASHINGTON The U.S. economy won't achieve the Trump administration's 3 percent growth goal this year and not until all of its tax, regulatory, trade and energy policies are fully in place, Commerce Secretary Wilbur Ross said on Tuesday.
The GDP target "is certainly not achievable this year," Ross told Reuters in an interview. "The Congress has been slow-walking everything. We don't even have half the people in place."
But Ross said it ultimately could be achieved in the year after all of Republican President Donald Trump's business-friendly policies are implemented. He noted that delays were possible if the push for tax cuts was slowed down in Congress.
Ross also signaled the Trump administration would try to use existing tools to aggressively enforce trade rules and insist on fairer treatment for U.S. goods, rather than adopt the slash-and-burn approach Trump discussed on the campaign trail in 2016.
The comments appear to represent another move to the center by the administration, with Ross acknowledging that trade deficits for things like imported oil are "blameless" and not inherently bad.
Ross, a billionaire investor, said the Commerce Department is working on some "self-initiated" anti-dumping and anti-subsidy cases on behalf of private industries that could help shield them from unfairly traded imports.
"I believe that enforcement will be one of the major tools for fixing things," he said.
U.S. trading partners have been spooked by Trump's vow to renegotiate or pull out of trade deals, such as the North American Free Trade Agreement, which the Republican president considers unfair to U.S. industry and workers.
A possible rise in the use of U.S. tariffs to punish foreign companies deemed to be competing unfairly also has raised concerns of a wave of protectionism.
Ross, however, insisted that the Trump administration was not aiming to restrict trade with its actions.
"What we are restricting is trade that violates trade agreements or violates WTO rules. Not much point of having trade agreements if you are not going to enforce them," he said.
He said World Trade Organization rules were slow to punish trade violators and singled out its most-favored nation clause as a problem for Washington because it allows widely divergent tariffs.
The United States, for example, has a 2.5 percent tariff on vehicle imports for countries without U.S. free trade deals, while the European Union has a 10 percent tariff and China collects a 25 percent tariff.
"The reality is from the point of view of the U.S., the most favored nation clause is actually an impediment to freeing up trade," Ross said, adding that tariffs would come down if reciprocality was respected.
But how such a change could be made to equalize tariffs within the organization "remains to be seen," he added.
Ross also said that not all U.S. trade deficits are necessarily bad or the result of trade agreement violations, as there are some "blameless" deficits such as those caused by the U.S. need to import oil.
(Reporting by David Lawder, Kevin Krolicki, David Chance, Jennifer Ablan and Howard Schneider; Editing by Paul Simao)
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