Trump's team's take on tax, trade and tariffs

US President-elect Donald Trump with Mr Todd Ricketts, co-owner of the Chicago Cubs. Mr Trump nominated Mr Ricketts for US Deputy Commerce Secretary on Wednesday.
US President-elect Donald Trump with Mr Todd Ricketts, co-owner of the Chicago Cubs. Mr Trump nominated Mr Ricketts for US Deputy Commerce Secretary on Wednesday.PHOTO: AGENCE FRANCE-PRESSE

Big tax cut for middle class; shift to bilateral trade pacts; tariffs are 'the last thing'

WASHINGTON • US President-elect Donald Trump's nascent administration has begun outlining the contours of its strategy to jump-start the nation's economy, including how it will overhaul the tax code, rethink trade agreements and negotiate directly with major corporations.

Treasury Secretary nominee Steven Mnuchin and Mr Trump's pick for Commerce Secretary, Mr Wilbur Ross, called for a move away from the broad multinational free trade agreements that have shaped the global economy over the past generation in favour of bilateral deals.

But they stopped short of embracing Mr Trump's most heated election rhetoric, such as calling China the world's "single greatest currency manipulator" and threatening double-digit tariffs on imports from China and Mexico.

On Wednesday, his top economic advisers demurred when asked whether they would take formal action against China. "If we determine that we need to label them as a currency manipulator, that's something the Treasury would do," Mr Mnuchin said.

And although they expressed disapproval of multinational trade agreements in favour of bilateral deals, they backed away from tariff threats.

"Everybody talks about tariffs as the first thing. Tariffs are the last thing. Tariffs are a part of the negotiation," Mr Ross said on CNBC. "The real trick is going to be increase American exports."

ON TAXES

There will be no absolute tax cut for the upper class. There will be a big tax cut for the middle class.

TREASURY SECRETARY NOMINEE STEVEN MNUCHIN, denying plans for tax cuts to benefit the wealthy.

On a tax overhaul, Mr Mnuchin rejected claims that Mr Trump's tax programme would benefit mainly the wealthy, instead highlighting plans for a childcare tax credit and a middle-class tax cut.

"There will be no absolute tax cut for the upper class," he said on CNBC. "There will be a big tax cut for the middle class."

Mr Trump's strategy secured an early victory this week when the President-elect persuaded air-conditioning manufacturer Carrier not to move up to 1,000 jobs from Indiana to Mexico. The negotiation was an unusual move for a modern president, but Mr Mnuchin suggested such direct intervention would be an important tool under the new administration.

"It starts with an attitude of this administration," he said. "This president, this vice-president-elect, is going to have open communications with business leaders."

Turning Mr Trump's sweeping campaign promises into reality could prove a daunting challenge for his newly named economics team, which includes Mr Todd Ricketts, co-owner of the Chicago Cubs, as Deputy Commerce Secretary.

ON TRADE

Everybody talks about tariffs as the first thing. Tariffs are the last thing. Tariffs are a part of the negotiation. The real trick is going to be increase American exports.

COMMERCE SECRETARY NOMINEE WILBUR ROSS, indicating the US may not carry out Mr Trump's tariff threat.

Mr Trump's proposals are both expansive and aggressive, starting with a pledge to create 25 million jobs and push growth to 4 per cent annually. Many economists have questioned whether that will be possible in the face of an ageing workforce and slower growth in productivity.

As well, rewriting the tax code would be a mammoth undertaking that has eluded Republican lawmakers since the 1980s, and independent analysts cast doubt on whether Mr Trump can make the numbers add up.

WASHINGTON POST

A version of this article appeared in the print edition of The Straits Times on December 02, 2016, with the headline 'Trump's team's take on tax, trade and tariffs'. Print Edition | Subscribe