Lighthizer, allies preparing to argue for steep new Trump tariffs - Politico

Investing.com - President-elect Donald Trump's former US Trade Representative Robert Lighthizer and people close to him are laying the groundwork to pitch the benefits of potentially aggressive tariffs, according to Politico.

Citing a document, the news service said Lighthizer and his allies have been circulating memos regarding plans to persuade both lawmakers and the US public that higher tariffs will boost economic activity, rather than hinder it.

On the campaign trail, Trump proposed rolling out blanket levies of up to 20% on imports coming into the US, as well as a 60% duty on items from China.

Although critics have flagged tariffs could ultimately reignite recently waning inflationary pressures, a source close to policy planning told Politico that Lighthizer and his allies will argue that economic models have failed to "accurately predict changes in the economy."

Politico added that the circulated document will point to a study conducted by the US International Trade Commission which showed that tariffs imposed during Trump's first term in office contributed to an increase in domestic production in "every single industry."

Meanwhile, Lighthizer and Trump's transition team have also been in talks with Congressional staff regarding Congress potentially backing the incoming administration's tariff policies through legislation, Politico reported. This action would both break from years of precedent set by both Republicans and Democrats and make it more difficult for future presidents to reverse the tariffs.

Congress has not imposed a tariff in almost a century, rather choosing to allow the president to adopt such measures -- albeit only under extraordinary circumstances.

Lighthizer was also named as a possible candidate for a number of key economic positions in the new Trump White House, including secretary of Commerce, Treasury, or a senior adviser role, Politico said.

In a note to clients, analysts at ING said Lighthizer's return to the forefront of US economic policymaking "shouldn't have come as a surprise but serves as a reminder that US protectionism is on its way."