President Donald Trump has “absolute authority” to cite national security concerns in order to impose tariffs on steel imports, but that doesn’t necessarily mean it is a good idea, former Commerce Secretary Carlos Gutierrez told CNBC on Friday.
The Commerce Department is currently investigating whether steel imports threaten U.S. security. A decision was expected by Friday.
Meanwhile, Axios reported Friday Trump is “hell-bent” on slapping tariffs potentially as high as 20 percent on steel.
“Whether that is the way to solve the steel capacity issue is another thing. Because this national security concept is somewhat ambiguous, you can expect for China to do some kind of retaliation,” he said in an interview with “Power Lunch.”
“It’s a slippery slope and I think we have to be careful.”
That retaliation could come in the form of Chinese tariffs on U.S. imports, Gutierrez said. The country has a particular interest in technology and would like to create its own cloud, he added.
Using the national security premise may also have other implications.
“Do other countries start using a similar argument? Do other countries start making a case for their national security interests? I think that’s the risk here,” said Gutierrez.
— CNBC’s Evelyn Cheng contributed to this report.