‘We Get Ripped Off Around The World’: Trump Commerce Secretary Says Tariffs Will Make Trade ‘Fair’

Commerce Secretary Howard Lutnick told CNBC in an interview Tuesday morning that President Donald Trump’s tariffs will make trade “fair,” arguing that the United States has been “ripped off” by other countries.

Trump’s 25% tariffs on all Canadian and Mexican imports and 20% on China went into effect on Tuesday, sparking a trade war as all three nations have vowed to respond with reciprocal tariffs on U.S. goods. Asked by CNBC host Joe Kernan about tariffs increasing prices for Americans, Lutnick responded by asking why vehicles sold in the United States are being made in Canada and Mexico.

The Commerce Secretary argued that tariffs would create more jobs in America as car manufacturers would move production to the United States to avoid tariffs. Lutnick agreed with Kernan that car companies would likely take longer than a few months to move all of their production to the United States.

“I agree with you. They can’t do it in three months,” Lutnick said. “But they can do it in six months, and you’re going to see jobs created in America, cars [made] in America. You build it here, you don’t pay any tariff.”

At least one car company, Honda, reportedly set up plans to produce its next generation Civic hybrid in Indiana instead of Mexico to avoid Trump’s tariffs.

According to Lutnick, the Trump administration will focus on “renegotiating” a deal with its trading partners and attempt to “make the world fair and reciprocal.”

“You guys have no idea how bad the deals are that America suffers with,” he continued. “Everybody charges … dairy is 250% in Canada. You guys don’t think about that stuff, but it’s unbelievable the way we get ripped off around the world. And Donald Trump’s going to level-set it, make it reciprocal, and make it fair.”

“You can’t kill Americans and get away with it,” Lutnick added, seemingly referring to Trump’s strategy to use tariffs to put pressure on China, Canada, and Mexico to prevent drug trafficking into the United States. Trump told reporters on Monday that there was “no room left for Mexico or for Canada” to hash out a deal before the tariffs went into effect overnight. The president reportedly remains unhappy with how Canada and Mexico are addressing drug trafficking after both nations promised to do more to secure their borders with the United States last month.

“And just so you understand, vast amounts of fentanyl have poured into our country from Mexico, and as you know, also from China, where it goes to Mexico and goes to Canada,” Trump said.

During his CNBC interview, Lutnick was emphatic that “tariffs do not create inflation.”

“Printing money creates inflation. You have a balanced budget, there can’t be inflation,” he added, acknowledging that tariffs could raise prices for some products.

“China has the highest tariffs in the world. Everything gets tariffed in China, and they don’t have inflation, in fact they have deflation,” Lutnick said. “India, the second-highest tariffs in the world, they don’t have inflation. So this concept is just people whining and complaining and not being truthful.”

According to Trading Economics, China’s year-over-year inflation rate is sitting at 0.5% as of January, but the communist country’s persistently low inflation has raised concerns about potential deflation, which can lead to lower profits for businesses. India’s inflation, meanwhile, sits at 4.3%, which is higher than the 3% year-over-year inflation rate in the United States.