Former Labor Secretary Robert Reich on Wednesday sharply criticized President Trump's decision to impose 50 percent tariffs on Canadian imports, calling the move "irrational" and warning that it would drive up costs for American consumers, particularly in the housing sector.
In an interview with CNBC's Andrew Ross Sorkin on "Squawk Box," Reich, who served under President Bill Clinton, said the tariffs would make Canadian lumber and other building materials more expensive, exacerbating the nation's housing affordability crisis. "As Canadian wood products become even more expensive, you're going to see housing becoming, again, even more of a basket case," he said. "And in the long term, Treasurys, the effect on mortgage rates – well, this is a major, important sector of the economy."
Reich specifically highlighted the impact on younger Americans trying to buy their first homes. "That is a particular problem for young people trying to get into the housing market," he continued. "I see the Canadian trade war as just irrational, completely and totally irrational."
The tariffs, which took effect Saturday, apply to $20 billion in Canadian imports after last-ditch negotiations between the two countries collapsed Friday night. Canada retaliated the next day with tariffs of up to 50 percent on more than 700 American products, including cheese, steel and aluminum goods, carpets, and fish.
Reich rejected the administration's framing that tariffs would address affordability concerns, a top issue for voters. He argued that the trade war, along with other policies, is making life harder for ordinary Americans. "I think all these things are actually making consumers more desperate and everything less affordable," he said. "The way you deal with the trade war is you stop it."
The former labor secretary described the tariffs as "damaging for both sides" and accused Trump of "lashing out" amid his broader political troubles, including the ongoing conflict with Iran. "You know, if this were a joke, if this were a sort of Mel Brooks movie, that would be one thing," Reich said, referencing the comedian. "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 has defended the tariffs, accusing Canada of being "among the worst Nations in the World to deal with." The president's aggressive trade stance is now setting up a potential clash with Senate Republicans, who are concerned about the economic fallout in their states with the November midterm elections approaching.
Sen. Susan Collins (R-Maine) publicly called the new tariffs "a mistake," urging a return to the historically close and mutually beneficial U.S.-Canada trade relationship. "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. Collins expressed hope that the administration was close to a deal and would "bring about an agreement."
The escalating trade dispute comes as the administration also faces legal challenges over other policies, including voting restrictions and asylum bans. Meanwhile, the president's broader economic agenda has drawn criticism from some Republicans who question the departure from free-market principles, a shift that has been noted in recent analyses of his trade and industrial policies.
