Former Labor secretary calls Trump’s Canada tariffs ‘irrational’

Former Labor Secretary Robert Reich on Wednesday called President Trump’s 50 percent tariffs on Canadian imports “irrational.”

Reich warned in an interview with “Squawk Box” co-host Andrew Ross Sorkin on CNBC that prices would rise, particularly for housing, as a result of the trade war.

“And as Canadian wood products become even more expensive, you’re going to see housing becoming, again, even more of a basket case,” Reich, who served under former President Clinton from 1993 to 1997, said. “And in the long term, Treasurys, the effect on mortgage rates –– well, this is a major, important sector of the economy.”

“That is a particular problem for young people trying to get into the housing market,” Reich continued. “I see the Canadian trade war as just irrational, completely and totally irrational.”

The U.S. tariffs on Canada went into effect Saturday and apply to $20 billion in Canadian imports, after negotiations between the two countries failed late Friday. Canada retaliated the next day with tariffs of up to 50 percent on more than 700 American exports, ranging from cheese, metal products made of steel or aluminum, carpets, fish and more.

Reich, responding to Sorkin’s point that voters are widely concerned about affordability and the cost of living, said he would not handle affordability with a trade war, tariffs or a “war in the Middle East,” referring to the Iran war.

“I think all these things are actually making consumers more desperate and everything less affordable,” he continued. “The way you deal with the trade war is you stop it.”

The former Labor secretary called the tariffs “damaging for both sides” and said Trump was “lashing out.”

“You know, if this were a joke, if this were a sort of Mel Brooks movie, that would be one thing,” Reich said, referring to the comedian and filmmaker. “But it’s not a joke. I think our president is simply lashing out because he wants to show dominance. He feels so trapped in Iran. … Canada is just an easy mark for a bully.”

Trump accused Canada of being “among the worst Nations in the World to deal with.”

The president faces a potential clash with Senate Republicans over the trade war’s ramifications for their states, particularly with the November midterm elections not far away.

Sen. Susan Collins (R-Maine) called the new tariffs imposed on Canada “ a mistake .”

“I really want us to go back to the very friendly, economically beneficial relationship that we have with our Canadian neighbors,” she told News Center Maine. She added that she thought the Trump administration was close to a deal and expressed hope that it “brings an agreement.”