Trump’s economic policies spur GOP angst

Trump’s economic policies spur GOP angst
© Greg Nash

GOP nerves are on edge over the direction of President TrumpDonald John TrumpScarborough mocks 'Deflection Don' over transgender troop ban Pelosi condemns Trump's 'cowardly, disgusting' ban on transgender troops Trump moves to ban most transgender people from serving in military MORE’s economic policy, given the prospects for new tariffs and the resignation of Gary Cohn, whom they viewed as a voice of reason within the administration.

For a GOP used to dealing with pro-trade Republican presidents, the threat to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports has been a thunderbolt.

It has left lawmakers worried about what could come next and whether Trump might follow through on threats to rip up the North American Free Trade Agreement (NAFTA) with Canada and Mexico or limit car imports from Europe.

“It’s just not a good thing to be threatening trade wars,” said Sen. Ron JohnsonRonald (Ron) Harold JohnsonOvernight Health Care: House passes .3T omnibus | Bill boosts funds for NIH, opioid treatment | Senators spar over ObamaCare fix | 'Right to Try' bill heads to the Senate GOP pushes to change Senate rules for Trump House passes 'right to try' drug bill MORE (R-Wis.). “If this is a grand strategy in terms of a tough negotiating stance, I hope the negotiation succeeds. It’s just, from my standpoint, a pretty risky strategy if that’s what this is all about.”

Republicans won some good news on Wednesday when the White House signaled that Trump’s plan to impose tariffs on steel and aluminum imports could be modified to exclude U.S. allies.

“We expect that the president will sign something by the end of the week and there are potential carveouts for Mexico and Canada based on national security, and possibly other countries as well,” White House press secretary Sarah Huckabee Sanders told reporters.

Her comments suggested a GOP effort to sway the administration to soften Trump’s approach was succeeding.

On Wednesday afternoon, more than 100 House lawmakers led by Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyRepublicans open to targeted China tariffs despite steel flap GOP pushes for 'phase two' of tax cuts Lighthizer, Ross set to talk trade on Capitol Hill next week MORE (R-Texas) delivered a letter to Trump urging caution.

“Because tariffs are taxes that make U.S. businesses less competitive and U.S. consumers poorer, any tariffs that are imposed should be designed to address specific distortions caused by unfair trade practices in a targeted way while minimizing negative consequences on American businesses and consumers,” they wrote.

Senate Republicans have lobbied senior administration officials in recent days.

“I’ve talked to administration officials a lot in the last few weeks, including this morning and last night, trying to encourage them to, in my view, take a more targeted approach that would be better for the people they’re trying to protect,” said Sen. Rob PortmanRobert (Rob) Jones PortmanLawmakers introduce bipartisan bill to speed up infrastructure permitting Overnight Tech: Zuckerberg breaks silence on Cambridge Analytica controversy | Senate passes sex trafficking bill | EU pushes new tax on tech | YouTube toughens rules on gun videos Senate passes controversial online sex trafficking bill MORE (R-Ohio), a leading trade expert in Congress who served as U.S. Trade Representative under George W. Bush.

Sen. John HoevenJohn Henry HoevenTrump’s economic policies spur GOP angst Crop sale incentive program is wrong policy for trade and security Sen. Steve Daines knows the ski slopes, residents MORE (R-N.D.), like other senators from farm states, is worried that the tariffs could lead to retaliation against U.S. exports. He shared his misgivings with Agriculture Secretary Sonny PerdueGeorge (Sonny) Ervin PerdueTrump Cabinet members press Senate panel on infrastructure overhaul Overnight Energy: Zinke grilled on travel, offshore drilling plans | Pruitt says California can't dictate emissions standard | Dems sound off on elephant trophy policy Agriculture chief talks Trump trade differences, Cohn departure MORE.

“The concern is a lot of time that when it comes to retaliation they go after ag first,” said Hoeven. “The effort right now is to talk to the administration and find out what they’re going to do.”

But even if the steel and aluminum tariffs that Trump is expected to announce on Thursday are softened, it will not completely calm Republicans unnerved by signs that their president is leaning into his economic nationalist policies.

Cohn’s decision to resign, which was linked to the tariff announcement, was widely seen as a sign that forces moderating Trump’s populist instincts on trade were losing power.

Cohn is a former Goldman Sachs chief operating officer who was instrumental in the passage of Trump’s tax-reform package. He frequently battled with officials within the administration who disagreed with him on trade, climate change and other issues.

“I think he provided President Trump with a valuable source of advice on trade policy,” said Sen. Lamar AlexanderAndrew (Lamar) Lamar AlexanderOvernight Health Care: House passes .3T omnibus | Bill boosts funds for NIH, opioid treatment | Senators spar over ObamaCare fix | 'Right to Try' bill heads to the Senate Overnight Regulation: Omnibus includes deal on tip-pooling rule | Groups sue over rules for organic livestock | AT&T, DOJ make opening arguments in merger trial Warren presses Mulvaney, Azar on tip pooling MORE (R-Tenn.), who noted that Cohn reminded Trump of the negative fallout from a decision by then-President Bush in 2002 to impose global steel tariffs.  

Just as worrisome for Republicans is that other voices within the administration could be further elevated with Cohn gone.

Sen. Lindsey GrahamLindsey Olin GrahamBernie Sanders to Trump: Firing Mueller 'an impeachable offense' The Memo: Lawyer’s exit signals harder line by Trump Senators introduced revised version of election cyber bill MORE (R-S.C.) has publicly criticized White House policy adviser Stephen Miller, who is seen as having a significant influence on immigration, among other issues. Director of Trade Peter Navarro and Commerce Secretary Wilbur RossWilbur Louis RossEthics filings haven't yet shown Commerce chief's pledged divestments: report Trump blasts Congress for sending him omnibus bill that 'nobody read' The Hill's 12:30 Report MORE are among the officials who pressed Trump for a protectionist approach on trade.

Senate Republican Whip John CornynJohn CornynSenate approves .3 trillion spending bill, sending to Trump GOP senator threatened to hold up bill over provision to honor late political rival: report Overnight Health Care: House passes .3T omnibus | Bill boosts funds for NIH, opioid treatment | Senators spar over ObamaCare fix | 'Right to Try' bill heads to the Senate MORE (Texas) said he was worried about recent comments by Treasury Secretary Steven MnuchinSteven Terner MnuchinTrump says new tariffs, penalties on China could total B White House race to replace Hope Hicks has two lead contenders Overnight Finance: Congress struggles to strike funding deal as deadline nears | Immigration, ObamaCare, Gateway project divide lawmakers | FTC to probe Facebook | Mnuchin plays hardball on tariffs MORE linking the tariff threat to NAFTA.

“I saw some comments from Mr. Mnuchin sort of tying the tariffs to NAFTA and saying, ‘Well, this may be an issue in the negotiation on NAFTA,’ ” he said.

“It seems to me he’s connected those two. I was already concerned about NAFTA and hope this doesn’t add to the complexity,” Cornyn said.

Cornyn expressed concern about the advice the president will receive from senior advisers on trade issues once Cohn is gone.

“I want to make sure the president is getting good advice because of the concerns raised by not only these tariffs but trade generally. I think Mr. Cohn was one of the best people giving him good advice,” he said.

Several GOP lawmakers are privately voicing pessimism over the likelihood of Trump finding a proponent of free trade with as much expertise and clout as Cohn to become the next director of the National Economic Council.

“Who from the A team with any gravitas is going to take that job?” remarked one Republican senator, pointing to the exodus of senior officials from the administration.

Senators at a lunch meeting on Wednesday discussed whether Trump’s actions could be blocked by a court ruling. Others are pushing a legislative response.

Sen. Mike LeeMichael (Mike) Shumway LeeConservatives balk over funding bill ahead of shutdown  Overnight Defense: Senate sides with Trump on military role in Yemen | Dem vets push for new war authorization on Iraq anniversary | General says time isn't 'right' for space corps Senate sides with Trump on providing Saudi military support MORE (R-Utah) has a bill that would narrow Trump’s ability to invoke national security as a justification for tariffs, but it is seen as a long shot.

Sen. Jeff FlakeJeffrey (Jeff) Lane FlakeBernie Sanders to Trump: Firing Mueller 'an impeachable offense' Overnight Health Care: House passes .3T omnibus | Bill boosts funds for NIH, opioid treatment | Senators spar over ObamaCare fix | 'Right to Try' bill heads to the Senate The Hill's 12:30 Report MORE (R-Ariz.) noted that the bill would need to win Trump’s signature or muster the two-thirds votes in both chambers to override a veto.

“Sixty-seven votes would be tough to come by,” Flake said, citing the threshold in the Senate. “The best route right now is to try to talk the president out of it.”