Trump reviews 'Made in America' products at the White House

Donald Trump holds up a "Make Our Farmers Great Again" hat as he speaks during the Made in America Product Showcase. Photo / Getty Images

Checking out a speedboat, a fighter jet and a giant industrial magnet on the White House driveway, President Donald Trump showcased an array of "Made in America" products as his administration pushes back aggressively against critics who say his tariffs threaten the US economy.

Trump's event with a smorgasbord of American goods came at the start of a week in which trade discussions are expected to dominate, including talks with European officials and a trip to Illinois in which the President is planning to visit a community helped along by his steel tariffs.

Trump has vowed to force international trading partners to bend to his will as he seeks to renegotiate a series of trade deals he has long argued hurt American workers. But as he deepens the US involvement in trade fights, it raises questions on whether American consumers will feel the pain of retaliatory tariffs, and whether the president will incur a political price for his trade policies in the midterm elections.

"Our leaders in Washington did nothing, they did nothing. They let our factories leave, they let our people lose their jobs," Trump said at the White House. "That's not free trade, that's fool's trade, that's stupid trade and we don't do that kind of trade anymore."

Trump noted he would be meeting today with European officials, including European Commission President Jean-Claude Juncker. The US and European allies have been at odds over the President's tariffs on steel imports and are meeting as the dispute threatens to spread to the lucrative automobile business. "Maybe we can work something out," he said.

This week the President will visit Granite City, Illinois, the home of a US steel mill that has reopened after he imposed tariffs on steel imports.

Donald Trump holds up a "Make Our Farmers Great Again" hat as he speaks during the Made in America Product Showcase. Photo / Getty Images

On the South Lawn, Trump walked among a number of products manufactured across the nation, including a Lockheed Martin F-35 aircraft from Maryland, a Ford F-150 pickup truck from Michigan, a Newmar recreational vehicle from Indiana and a Ranger speedboat from Arkansas.

Trump has already put taxes on imported steel and aluminum, saying they pose a threat to US national security, an argument that enrages staunch US allies such as the European Union and Canada.

He's threatening to use the national security justification again to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totalled US$335 billion ($494b).

He's already imposed tariffs on US$34b in Chinese imports in a separate dispute over Beijing's high-tech industrial policies. He has threatened to ratchet that up past US$500b. Trade analysts say the US has not pursued such aggressive trade policies in decades.

In 1971, President Richard Nixon imposed a 10 per cent import tax for four months to pressure Japan and European countries to drive up the value of their currencies. The idea was to provide relief to American exporters, who were being put at a price disadvantage by a strong dollar.

In 1930, the US raised tariffs dramatically to protect American industry, encouraging other countries to do the same in a global trade war that made the Great Depression worse.

Economists said the tariffs that Trump has imposed so far - and the resulting retaliation - are unlikely to do much economic damage. But things could escalate rapidly.

"If you look at what's teed up, particularly with China and with the auto tariffs, pretty soon you are talking about some pretty large numbers. Those will do some real damage," Edward Alden, senior fellow at the Council on Foreign Relations said.

Oxford Economics has calculated that a full-blown US-China trade war would shave 1 per cent off the US economy and wipe out 700,000 jobs in the United States by 2020.

The Peterson Institute for International Economics has estimated a trade war over autos could cost up to 1.2 million American jobs.

Critics said Trump's aggressive approach makes it tough for other countries to offer concessions, lest they be seen by their own people as caving in to bullying. "The Trump administration has not left an easy path to walk away from the fights they've created," Alden said.

- AP