US Commerce Secretary Wilbur Ross. Photo: Reuters
US Commerce Secretary Wilbur Ross. Photo: Reuters

The US commerce secretary on Thursday played down any negative impact his administration’s announcement on metals tariffs will have, saying that markets will “adjust.”

“A 170-[point decline] is not very cataclysmic in any event,” Wilbur Ross said in an interview on CNBC. “Naturally, if the market, to the degree it was surprised, it’ll have to adjust to that. But markets adjust to facts.”

He was referring to a plunge in the Dow Jones Industrial Average, following a White House announcement that Mexico, Canada, and the European Union would not be granted exemption from harsh tariffs on steel and aluminum. As of the close, the Dow was down more than 250 points.

Contributing to the market reaction was the response by the US allies facing the tariffs, all of which vowed to retaliate. Mexico said it was prepared to slap penalties on US pork, fruit, cheese and flat steel, while Canadian officials said they would impose tariffs on more than US$12 billion in US goods, effective July 1. European Commission President Jean-Claude Juncker said Thursday that “countermeasures will follow,” in response to US President Donald Trump’s announced tariffs.

The decision to go forward with the tariffs provides the clearest evidence yet that the Trump administration is willing to follow through on threats, and comes after an announcement that they will move forward on tariffs on Chinese imports.

Secretary Ross is scheduled to arrive in Beijing on Saturday for ongoing trade talks with China, on which the Trump administration has failed to provide clarity. Reports in recent weeks have suggested that – after signs that the US was ready to come to an agreement with Beijing – there are still substantive disagreements in the White House on the issue.

Treasury Secretary Steven Mnuchin and economic adviser Larry Kudlow have at various times suggested the tariffs were a negotiating tactic, unlikely to take effect ultimately. Trade adviser Peter Navarro and US Trade Representative Robert Lighthizer, meanwhile, have consistently advocated for using tariffs as a means to make US manufacturing more competitive for the long term.