Commerce Secretary Wilbur Ross predicted on Tuesday that the U.S. and China will successfully negotiate a trade deal.
“Eventually, this will end in negotiation,” Ross said on CNBC’s “Squawk Box.” “Even shooting wars end in negotiations.”
With questions circulating about whether President Donald Trump and Chinese leader Xi Jinping would meet on trade at the G-20 meeting later this month, the U.S. president told CNBC on Monday he would place additional tariffs on Chinese goods if Xi does not attend.
“The China deal is going to work out. You know why? Because of tariffs,” Trump said in a “Squawk Box” call with CNBC’s Joe Kernen. “Right now, China is getting absolutely decimated by companies that are leaving China, going to other countries, including our own, because they don’t want to pay the tariffs.”
Ross, who has spoken out in favor of Trump’s tariff strategy, warned that trade deals are not made at summits. He said any talks between Trump and Xi would lay the groundwork for a possible agreement.
In May, Trump increased tariff rates on $200 billion worth of Chinese goods and threatened to put levies on another $300 billion, effectively the rest of China’s imports in the United States.
An agreement with China would have to fix all the violations that the U.S. alleges, otherwise making a deal would not make any sense, said Ross, who before joining the White House, made a fortune in the investment world, running W.L. Ross & Co., and buying stakes in distressed assets.
“Either we will collect more and more tariffs on more and more products or we’ll back an arrangement with them,” Ross said, while warning investors not to get too “trigger happy” when Trump threatens tariffs.
After the president warned Mexico on May 30 that he would put a 5% tariff on all Mexican goods if they did not take actions to help curb undocumented migrants from coming into the U.S., Ross said that “people were getting hysterical” and the markets got “a little too jumpy.” The day after the proposed tariffs were announced, the Dow Jones Industrial Average plunged more than 350 points.
“Judge this administration by results,” Ross said. “Don’t judge it by interim soundbites.” Late Friday, the president called off the Mexico tariffs, saying the U.S. and Mexico agreed to follow through on earlier concessions it had made on immigration.
In Monday’s CNBC interview, Trump said the deal came together in just two days because Mexico’s leaders knew the alternative would have been worse.
“We got everything we wanted and we’re going to be a great partner to Mexico now because now they respect us,” Trump said. “They didn’t even respect us. They couldn’t believe how stupid we were with everything that’s going on where somebody comes in from Mexico and just walks right into our country and we’re powerless to do anything.”