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Ross says stock market drops won't influence Trump on trade

Ross says stock market drops won't influence Trump on trade
© Anna Moneymaker

Commerce Secretary Wilbur RossWilbur Louis RossFormer Trump officials find tough job market On The Money: Retail sales drop in latest sign of weakening economy | Fast-food workers strike for minimum wage | US officials raise concerns over Mexico's handling of energy permits US officials raise concerns over Mexico's handling of energy permits MORE on Monday said President TrumpDonald TrumpWarren says Republican party 'eating itself and it is discovering that the meal is poisonous' More than 75 Asian, LGBTQ groups oppose anti-Asian crime bill McConnell says he's 'great admirer' of Liz Cheney but mum on her removal MORE won't shift his trade policies based on stock market fluctuations.

The Trump administration has levied billions in tariffs on close allies and trading partners in the past few months, raising the specter of an all-out trade war.

Those economic partners are now punching back with retaliatory tariffs that could cause job losses and damage the nation's vibrant economy.

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"There's no bright line level of the stock market that's going to change policy," Ross said on CNBC's "Squawk Box."

"The president is trying to fix long-term problems that should have been fixed a long time ago," he said.

The stock markets have been flat for most of the year and Trump has mentioned them much less often as an example of how his economic policies are boosting the nation's growth.

Ross said the Trump administration would not say what level the stock market would have to drop to before any trade policies are adjusted.

"That's not how you make policy," he said. "You have to make policy based on what's fundamentally good for the economy, what's fundamentally good for the long-term," he said. "You can't deal just with day-to-day stock market fluctuation."

Trade watchers, including a wide range of business groups, are concerned that the tariffs will wipe out any economic gains from tax and regulatory changes and eventually cause job losses and a slow down.

In fact, Ross touted the strength of the economy as reason why he thinks the tariffs won't cause much harm to growth.

"So I think all these claims about the sky is falling are at best premature and probably quite inaccurate," Ross said.

Growth in the first three months of the year fell to 2 percent although the forecast for the second quarter is much stronger. 

Ross said he expects the April-June growth figures will top 3 percent and move closer to the 4 percent mark.

The Trump administration has ratcheted up tensions among America's closest allies and biggest trading partners by imposing a range of tariffs on steel and aluminum on Canada, Mexico and the European Union as well as other duties for China's alleged theft of U.S. intellectual property.

The White House also is considering a 25 percent tariff on auto imports. 

Ross said it's "premature" to say whether Trump will follow through with his plan to impose tariffs on auto imports.

The Section 232 investigation into whether those imports threaten national security started last month.

The EU said it would move to hit the United States with as much as $300 billion in retaliatory tariffs over the autos issue.

Public hearings on the issue are set for July 19-20.

After that the Commerce Department will begin preparing recommendations for the president so it's "quite a bit premature to decide how the report will come to a conclusion," Ross said.