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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 Trump Pence said he's 'proud' Congress certified Biden's win on Jan. 6 Americans put the most trust in their doctor for COVID-19 information: poll OVERNIGHT DEFENSE: Biden administration to evacuate Afghans who helped US l Serious differences remain between US and Iran on nuclear talks l US, Turkish officials meet to discuss security plans for Afghan airport 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.

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“It’s just not a good thing to be threatening trade wars,” said Sen. Ron JohnsonRonald (Ron) Harold JohnsonOvernight Defense: Joint Chiefs warn against sweeping reform to military justice system | Senate panel plans July briefing on war authorization repeal | National Guard may have 'training issues' if not reimbursed Senate panel plans July briefing on war authorization repeal Overnight Defense: Senate panel delays Iraq war powers repeal | Study IDs Fort Hood as least-safe base for female soldiers | Pentagon loosens some COVID-19 restrictions 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 BradyMcConnell presses for 'actual consequences' in disclosure of tax data On The Money: House Democrats line up .5T in spending without budget | GOP takes aim at IRS | House Democrat mulls wealth tax Republicans open new line of attack on IRS 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 PortmanOcasio-Cortez criticizes bipartisan infrastructure deal for lack of diversity among negotiators Biden announces bipartisan deal on infrastructure Senators say White House aides agreed to infrastructure 'framework' MORE (R-Ohio), a leading trade expert in Congress who served as U.S. Trade Representative under George W. Bush.

Sen. John HoevenJohn Henry HoevenLobbying world Hillicon Valley: Facebook to resume some political donations | Microsoft says Russian hackers utilized email system used by USAID to target other groups | Senate confirms Biden's top scientist Khanna, Mace introduce bill to strengthen federal cyber workforce following major hacks 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 PerdueSonny PerdueThe Hill's Morning Report - Presented by Facebook - Georgia election day is finally here; Trump hopes Pence 'comes through for us' to overturn results Civil war between MAGA, GOP establishment could hand Dems total control Trump administration races to finish environmental rules, actions 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 AlexanderLamar AlexanderAuthorities link ex-Tennessee governor to killing of Jimmy Hoffa associate The Republicans' deep dive into nativism Senate GOP faces retirement brain drain 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 GrahamOn The Money: Biden announces bipartisan deal on infrastructure, but Democratic leaders hold out for more Trump's biggest political obstacle is Trump The Hill's Equilibrium — Presented by NextEra Energy — Tasmanian devil wipes out penguin population 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 RossCommerce Department unit gathered intel on employees, census critics: report Former 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 MORE are among the officials who pressed Trump for a protectionist approach on trade.

Senate Republican Whip John CornynJohn CornynThe Afghan Air Force: When 'Buy American' goes wrong Senators say White House aides agreed to infrastructure 'framework' Cornyn calls on Biden and Harris to visit southern border: 'Y'all come visit' MORE (Texas) said he was worried about recent comments by Treasury Secretary Steven MnuchinSteven MnuchinDemocrats justified in filibustering GOP, says Schumer Yellen provides signature for paper currency Biden's name will not appear on stimulus checks, White House says 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 LeeOVERNIGHT ENERGY: Biden announces bipartisan infrastructure deal | DOJ backs Trump-era approval of Line 3 permit | Biden hits China on solar panels Bipartisan agriculture climate bill clears Senate Democrats block GOP bill to lift mask mandate on public transportation 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 FlakeOn The Trail: Arizona is microcosm of battle for the GOP Trump looms large over fractured Arizona GOP Why Republican politicians are sticking with Trump 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.”