https://www.politico.com/story/2019/03/27/trump-auto-tariff-republicans-1240519
“If there’s no agreement and the tariffs get worse, my worry is that you could have a recession,” said Sen. Rand Paul said of President Donald Trump’s trade policy. | Jacquelyn Martin/AP Photo
Trade
Republicans warn Trump to back off economy-wrecking tariffs
GOP senators are warning the president his trade war could fuel a recession in the 2020 campaign.
By BURGESS EVERETT and ADAM BEHSUDI
03/27/2019 07:08 PM EDT
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Republicans are trying to head off their next potentially explosive conflict with President Donald Trump.
In a series of private meetings and conversations with Trump over the past few months, Senate Republicans have pleaded with him not to impose a new round of tariffs on foreign automakers — fearing they could debilitate Trump-backed states and cast the economy into a recession ahead of the 2020 election.
But Trump isn’t heeding the warnings so far.
Behind closed doors, GOP senators push back on Trump consistently when he brings up existing tariffs on steel and aluminum or potential tariffs on automakers, according to Republican senators. But Trump doesn’t back down from his position: He says the threat of tariffs gets the attention of trading partners — like China — who need to permit more imports of American products.
“The president likes tariffs as a threat. I hope he understands that the auto tariffs damage the autoworkers" in Midwest and southeastern states. "And I know he cares a lot about them. So I’m hopeful that he won’t do that,” said Sen. Lamar Alexander of Tennessee, where Nissan and Volkswagen have plants. But, he added: “If I were Japan and Europe, I wouldn’t relax.”
Whether GOP senators can head off another round of tariffs ultimately lies with the whims of the president. Administration officials have tried to reassure worried Republicans that the president has hit pause as he considers a trade report that would allow him to declare tariffs on the basis of national security.
But Republican senators said in interviews on Wednesday they have enormous concerns that Trump might go ahead with it anyway. That’s in part because Trump may once again make a unilateral decision. “He’s in conflict, to a certain extent, with his agencies,” said Sen. Johnny Isakson of Georgia, home to a Kia plant.
“To suggest that Volkswagens are a national security threat to the United States is not true and we should not be doing that. It would be very bad for our economy and very bad for our consumers,” said Sen. Pat Toomey (R-Pa.), among the most fervent tariff opponents.
Trump “has a position that he is trying to improve the overall trade culture,” said Sen. Tim Scott of South Carolina, which has a massive BMW plant. “I’ve tried to talk to him about the ricochet effect and negative impact [of tariffs]. I think BMW sells about 80,000 vehicles in China. Having those vehicles built in China cannot be good for us.”
But the Senate GOP is coming at the debate from a position of weakness, with limited legislative firepower at their disposal and Democrats far less worried about tariffs. So Republicans are relying on a persuasion campaign intended to let Trump know he could alienate his working-class voting base in a way that could stifle the manufacturing boom in the south and hit longstanding plants throughout the U.S. Domestic auto companies also are pressing the president to not move forward with foreign auto tariffs, according to a Republican senator who has raised the issue repeatedly with Trump.
Senate Finance Committee Chairman Chuck Grassley (R-Iowa) is moving forward with an effort that would allow Congress to put more restrictions on tariffs, but to become law, Trump would have to sign it or Republicans would have to cough up veto-proof majorities — an unlikely scenario with Trump’s dominance of the GOP.
Republicans’ best hope is that Trump is really using the threat of tariffs to show China he means business and to drive a harder bargain with Europe and Japan. But they acknowledge that Trump could ignore them in the end.
“People will be happy if there’s an agreement and it actually opens some markets. If there’s no agreement and the tariffs get worse, my worry is that you could have a recession,” said Sen. Rand Paul (R-Ky.), a close Trump ally who has a Toyota plant in his home state as well as domestic plants. “I hope persuasion will work instead of waiting for an economic problem.”
Trump is weighing the new tariffs after receiving a report from the Commerce Department last month giving him the legal justification to move forward. Trump has 90 days after the report was submitted to make a decision.
But the conflict has been brewing for weeks. In late February, Commerce officials briefed aides on the Senate Finance and House Ways and Means committees. It didn't go well.
“It was described as the worst, most tense meeting they had participated in with members of the administration,” said an industry source.
The meeting prompted a bipartisan group of senators to fire off a letter to Commerce Secretary Wilbur Ross with a list of questions they wanted answered in 10 days. That included how the department, which led the investigation, defined national security for the purpose of imports of autos.
But the most substantive pushback has come from lawmakers themselves. Tennessee Sens. Marsha Blackburn and Alexander raised concerns about the tariffs in a meeting at the White House two weeks ago, according to sources familiar with the meeting.
“He’s very good about listening to us. I don’t think I’ve persuaded him very much on tariffs so far,” Alexander said. “What I said to him: ‘I want to support the North American agreement. But it will be much easier to pass and better to pass without the tariffs.”
Indeed, the constant threat of auto tariffs is clouding the path for Trump’s marquee trade achievement — the new U.S.-Mexico-Canada Agreement that is intended to replace the 25-year-old NAFTA deal. But Trump sees things differently: as a point of leverage to get foreign trading partners to offer up concessions in upcoming negotiations.
The Trump administration also wants to negotiate new trade deals with the European Union and Japan, both of which export significant numbers of vehicles to the U.S. Trump agreed with political leaders in the EU and Japan that the tariff threat would be pulled back as long as negotiations were occurring.
“We should in fact be operating under that non-escalation agreement. And therefore, we should not see tariffs on the European autos,” Toomey said.
Still, it’s unclear whether the threat is working. The European Union has refused to negotiate on agriculture in potential talks with the U.S., which Washington is demanding. Brussels also said it would walk away from the table and retaliate if the president moves forward with tariffs. Trump has also repeatedly singled out Germany in private talks with senators, according to an attendee.
Even if it is only used as a negotiating strategy, Republican lawmakers are raising the alarm that the constant threat of tariffs to get countries to the table sets a bad precedent for future talks.
“Most of our members are opposed to auto tariffs and they’ve made that clear to the president,” said Sen. John Thune of South Dakota, the Republican whip.
Republicans have been through this before on the steel and aluminum tariffs. Some urged Senate Majority Leader Mitch McConnell (R-Ky.) to bring legislation to the floor allowing them to block the tariffs. But McConnell never did, in part because Trump would never sign it and also because it would expose another intraparty divide.
Grassley is preparing to move legislation that would claw back tariff power for the Senate GOP. But he also knows it may never reach the president's desk. So even as he makes his push, he’s also taking a Zen-like approach toward the mercurial president.
“I don’t believe so,” said Grassley when asked whether Trump would move forward with the new tariffs. "It’s just kind of a gut feeling.”
“If there’s no agreement and the tariffs get worse, my worry is that you could have a recession,” said Sen. Rand Paul said of President Donald Trump’s trade policy. | Jacquelyn Martin/AP Photo
Trade
Republicans warn Trump to back off economy-wrecking tariffs
GOP senators are warning the president his trade war could fuel a recession in the 2020 campaign.
By BURGESS EVERETT and ADAM BEHSUDI
03/27/2019 07:08 PM EDT
Share on Facebook Share on Twitter
Republicans are trying to head off their next potentially explosive conflict with President Donald Trump.
In a series of private meetings and conversations with Trump over the past few months, Senate Republicans have pleaded with him not to impose a new round of tariffs on foreign automakers — fearing they could debilitate Trump-backed states and cast the economy into a recession ahead of the 2020 election.
But Trump isn’t heeding the warnings so far.
Behind closed doors, GOP senators push back on Trump consistently when he brings up existing tariffs on steel and aluminum or potential tariffs on automakers, according to Republican senators. But Trump doesn’t back down from his position: He says the threat of tariffs gets the attention of trading partners — like China — who need to permit more imports of American products.
“The president likes tariffs as a threat. I hope he understands that the auto tariffs damage the autoworkers" in Midwest and southeastern states. "And I know he cares a lot about them. So I’m hopeful that he won’t do that,” said Sen. Lamar Alexander of Tennessee, where Nissan and Volkswagen have plants. But, he added: “If I were Japan and Europe, I wouldn’t relax.”
Whether GOP senators can head off another round of tariffs ultimately lies with the whims of the president. Administration officials have tried to reassure worried Republicans that the president has hit pause as he considers a trade report that would allow him to declare tariffs on the basis of national security.
But Republican senators said in interviews on Wednesday they have enormous concerns that Trump might go ahead with it anyway. That’s in part because Trump may once again make a unilateral decision. “He’s in conflict, to a certain extent, with his agencies,” said Sen. Johnny Isakson of Georgia, home to a Kia plant.
“To suggest that Volkswagens are a national security threat to the United States is not true and we should not be doing that. It would be very bad for our economy and very bad for our consumers,” said Sen. Pat Toomey (R-Pa.), among the most fervent tariff opponents.
Trump “has a position that he is trying to improve the overall trade culture,” said Sen. Tim Scott of South Carolina, which has a massive BMW plant. “I’ve tried to talk to him about the ricochet effect and negative impact [of tariffs]. I think BMW sells about 80,000 vehicles in China. Having those vehicles built in China cannot be good for us.”
But the Senate GOP is coming at the debate from a position of weakness, with limited legislative firepower at their disposal and Democrats far less worried about tariffs. So Republicans are relying on a persuasion campaign intended to let Trump know he could alienate his working-class voting base in a way that could stifle the manufacturing boom in the south and hit longstanding plants throughout the U.S. Domestic auto companies also are pressing the president to not move forward with foreign auto tariffs, according to a Republican senator who has raised the issue repeatedly with Trump.
Senate Finance Committee Chairman Chuck Grassley (R-Iowa) is moving forward with an effort that would allow Congress to put more restrictions on tariffs, but to become law, Trump would have to sign it or Republicans would have to cough up veto-proof majorities — an unlikely scenario with Trump’s dominance of the GOP.
Republicans’ best hope is that Trump is really using the threat of tariffs to show China he means business and to drive a harder bargain with Europe and Japan. But they acknowledge that Trump could ignore them in the end.
“People will be happy if there’s an agreement and it actually opens some markets. If there’s no agreement and the tariffs get worse, my worry is that you could have a recession,” said Sen. Rand Paul (R-Ky.), a close Trump ally who has a Toyota plant in his home state as well as domestic plants. “I hope persuasion will work instead of waiting for an economic problem.”
Trump is weighing the new tariffs after receiving a report from the Commerce Department last month giving him the legal justification to move forward. Trump has 90 days after the report was submitted to make a decision.
But the conflict has been brewing for weeks. In late February, Commerce officials briefed aides on the Senate Finance and House Ways and Means committees. It didn't go well.
“It was described as the worst, most tense meeting they had participated in with members of the administration,” said an industry source.
The meeting prompted a bipartisan group of senators to fire off a letter to Commerce Secretary Wilbur Ross with a list of questions they wanted answered in 10 days. That included how the department, which led the investigation, defined national security for the purpose of imports of autos.
But the most substantive pushback has come from lawmakers themselves. Tennessee Sens. Marsha Blackburn and Alexander raised concerns about the tariffs in a meeting at the White House two weeks ago, according to sources familiar with the meeting.
“He’s very good about listening to us. I don’t think I’ve persuaded him very much on tariffs so far,” Alexander said. “What I said to him: ‘I want to support the North American agreement. But it will be much easier to pass and better to pass without the tariffs.”
Indeed, the constant threat of auto tariffs is clouding the path for Trump’s marquee trade achievement — the new U.S.-Mexico-Canada Agreement that is intended to replace the 25-year-old NAFTA deal. But Trump sees things differently: as a point of leverage to get foreign trading partners to offer up concessions in upcoming negotiations.
The Trump administration also wants to negotiate new trade deals with the European Union and Japan, both of which export significant numbers of vehicles to the U.S. Trump agreed with political leaders in the EU and Japan that the tariff threat would be pulled back as long as negotiations were occurring.
“We should in fact be operating under that non-escalation agreement. And therefore, we should not see tariffs on the European autos,” Toomey said.
Still, it’s unclear whether the threat is working. The European Union has refused to negotiate on agriculture in potential talks with the U.S., which Washington is demanding. Brussels also said it would walk away from the table and retaliate if the president moves forward with tariffs. Trump has also repeatedly singled out Germany in private talks with senators, according to an attendee.
Even if it is only used as a negotiating strategy, Republican lawmakers are raising the alarm that the constant threat of tariffs to get countries to the table sets a bad precedent for future talks.
“Most of our members are opposed to auto tariffs and they’ve made that clear to the president,” said Sen. John Thune of South Dakota, the Republican whip.
Republicans have been through this before on the steel and aluminum tariffs. Some urged Senate Majority Leader Mitch McConnell (R-Ky.) to bring legislation to the floor allowing them to block the tariffs. But McConnell never did, in part because Trump would never sign it and also because it would expose another intraparty divide.
Grassley is preparing to move legislation that would claw back tariff power for the Senate GOP. But he also knows it may never reach the president's desk. So even as he makes his push, he’s also taking a Zen-like approach toward the mercurial president.
“I don’t believe so,” said Grassley when asked whether Trump would move forward with the new tariffs. "It’s just kind of a gut feeling.”
