Donald Trump Warns 'US May Have To Unwind Trade Deals And Will Suffer Greatly...'

(MENAFN- Live Mint) US President Donald Trump on Wednesday warned that the United States might need to“unwind” trade agreements with the European Union, Japan, South Korea, and others if it loses a tariffs case currently heading to the Supreme Court, as reported by Reuters.

He added that a defeat could cause the country“to suffer so greatly.”

Speaking to reporters at the White House, Trump said his administration plans to challenge a recent US appeals court decision that ruled many of his tariffs were unlawful. Despite the setback, he expressed confidence that the Supreme Court would ultimately side with his administration, Reuters reported.

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"We made a deal with the European Union where they're paying us almost a trillion dollars. And you know what? They're happy. It's done. These deals are all done," he said.“I guess we'd have to unwind them.”

These remarks marked the first time Trump explicitly suggested that trade agreements with major partners negotiated separately from the tariffs could be invalidated if the Supreme Court upholds last Friday's ruling.

He argued that reversing the tariffs would be financially damaging.

However, trade experts point out that the tariffs are paid by U.S. importers, not foreign companies, and economists have warned that such duties tend to drive up inflation domestically.

“Our country has a chance to be unbelievably rich again. It could also be unbelievably poor again. If we don't win that case, our country is going to suffer so greatly, so greatly,” Trump said.

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The appeals court ruling addressed the legality of what Trump calls“reciprocal” tariffs first imposed as part of a trade war in April, as well as a separate set of tariffs imposed in February against China, Canada and Mexico. The decision does not impact tariffs issued under other legal authority, such as those on steel and aluminium imports.

Trade experts said his comments on the cost of rescinding the tariffs were intended to convince the Supreme Court that removing the tariffs would unleash major economic chaos, Reuters reported.

Reuters reported that Ryan Majerus, a former senior US trade official who is now a partner with law firm King & Spalding, said it had been clear from the start that the trade deals with the EU and other trading partners were framework agreements that were subject to change, not fully fledged trade agreements.

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“The president's announcement today that the deals could be unwound reflects an effort to maximise leverage on the U.S. side,” he said.

Legal and trade experts say the Supreme Court's 6-3 majority of Republican-appointed justices may slightly improve Trump's odds of keeping in place at least some of the tariffs after the appeals court ruled 7-4 last week that they are illegal.

These deals are all done.

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But they say it is difficult to predict exactly what the court will do, given rulings in past cases and the unprecedented nature of the challenge.

Key Takeaways

• The Supreme Court's ruling could significantly impact U.S. trade agreements.
• Trump's comments highlight the complex relationship between tariffs and trade deals.
• Economic experts warn that tariffs may drive inflation and financial instability domestically.

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