Commerce Secretary Wilbur Ross is upbeat about President Trump’s trade agenda. But he’s not promising a free lunch. “If you don’t show you’re willing to absorb a little bit of pain, how on earth are you going to get things changed?” he said at the Milken Institute’s annual finance-fest in Los Angeles, before heading to China for trade negotiations.
In a conversation with Yahoo Finance Editor-in-Chief Andy Serwer, Ross jabbed the New York Times, rhapsodized about space, and predicted Trump’s threats on trade would ultimately produce success. Trade worries is one big thing holding back financial markets in an otherwise robust economy, with investors worried that tit-for-tat tariffs will blow up into an outright trade war.
Ross downplays those risks, pointing to tariffs on Korean-made washing machines the Trump administration imposed earlier this year. “There was a bit woe-is-me,” Ross said. “Well, guess what. Both Samsung and LG are increasing their production of washing machines in the United States.”
[More from the Milken Conference: Here’s what will cause the next stock-market crash]
The Commerce Secretary provided an update on negotiations with Canada and Mexico about revamping the North American Free Trade Agreement, a huge trade pact that undergirds much of the US economy. “Either we’ll have a deal in the next few weeks or it probably won’t be until the fall,” Ross said, pointing out that upcoming elections in Canada and Mexico this summer would probably require a pause if there’s not a deal. By the same logic, Ross’s fall deadline might be unrealistic, given that the US midterm elections are in November.
The New York Times recently ran a story saying the Chinese plan to rebuff key US demands on trade. Ross was droll when asked about that. “Apparently the New York Times has developed psychic powers,” he said, as titters filled the ballroom where he spoke.
Ross ripped the World Trade Organization, which is supposed to manage disputes between member countries, which include both China and the United States. “The WTO is an obsolete set of rules,” Ross said. “It’s been more or less created to benefit exporting countries [such as China], to the detriment of importing countries [such as the United States].” That mimics Trump’s frequent claims that the United States is a victim taken advantage of by smarter countries in various trade deals.
Ross showed a surprising passion for space, praising Elon Musk’s Space X for finding cheaper ways to launch rockets. Ross explained how his Commerce Department will function as “one-stop shopping” for new regulations meant to streamline commercial operations in space. “The man in the moon is going to become a gas station attendant,” Ross said. “To get big payloads to Mars, it would make sense to go to the moon and refuel there.” Since there’s little gravity on the moon, he explained, launches are easier. Ross predicted that space will rocket (sorry) from a $340 global business to one exceeding $1 trillion.
Serwer asked Ross what he thinks of the “Goldilocks” economy, in which most things are more or less going right. “I don’t like the ‘Goldilocks’ name because we don’t intend this economy to be eaten by a big bear,” he answered. Then he explained why everything will work out, for the foreseeable future.
Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman