Republicans think Trump is losing trade war

President TrumpDonald John TrumpTrump: 'I don't trust everybody in the White House' JPMorgan CEO withdraws from Saudi conference Trump defends family separations at border MORE is facing a significant backlash from Senate Republicans over his trade talks with China, which they see as delivering far less than he promised. 

Several GOP senators say Trump has wound up on the losing side of the discussions, and his talk of lifting rules barring U.S. companies from selling to the Chinese telecommunications firm ZTE has prompted a revolt.

ADVERTISEMENT

The Senate Banking Committee on Tuesday voted overwhelmingly in favor of an amendment to block Trump from easing penalties on ZTE, which violated U.S. sanctions by selling equipment to North Korea and Iran. The panel’s action followed a similar vote by a House panel last week.

Treasury Secretary Steven MnuchinSteven Terner MnuchinJPMorgan CEO withdraws from Saudi conference Ford Motor chairman pulls out of Saudi conference Durbin opposes Saudi arms sale over missing journalist MORE announced on “Fox News Sunday” that “we’re putting the trade war on hold” by pulling back on the threat of tariffs. But that announcement did not appease unhappy Republicans upset over the administration’s mixed messages.

Sen. Marco RubioMarco Antonio RubioSenators pledge action on Saudi journalist’s disappearance Senators concerned as Trump official disputes UN climate change warning Rubio: Response to death of Saudi journalist 'can't be symbolic' MORE (R-Fla.) blasted Trump’s trade strategy on Tuesday as ineffective.

“Sadly #China is out-negotiating the administration & winning the trade talks right now,” he wrote on Twitter. “They have avoided tariffs & got a #ZTE deal without giving up anything meaningful in return by using N. Korea talks & agriculture issues as leverage.”

Lawmakers from farm states have been the most vocal in pressing Trump to reconsider his tactics.

Sen. Ben SasseBenjamin (Ben) Eric SasseGOP senators praise Haley as 'powerful' and 'unafraid' Sasse: I encouraged Trump to pick someone other than Kavanaugh Sasse: Trump's rhetoric on Ford 'wrong' but not surprising MORE (R-Neb.) said farmers and ranchers he met with on Tuesday are not reassured by Trump’s claim over the weekend via Twitter that “China has agreed to buy massive amounts of additional farm/agricultural products.”

“I’ve been meeting with farmers and ranchers all morning. I have not yet heard one who thinks the U.S. has won anything from the Chinese leadership,” he said. “They’re scared to death.”

Sasse, who ripped Trump’s trade policies earlier this year as the “dumbest possible way” to take on China, said Trump doesn’t appear to have made significant progress addressing two major economic threats facing the United States: China’s ambitions to dominate high-tech industries and its rampant theft of U.S. intellectual property.

“All that I have seen would suggest that China’s winning,” he said. “The big two are the Made in China 2025 initiative and the way they steal our [intellectual property].”

Even Trump’s most loyal allies are expressing frustration.

Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchRomney defends Trump’s policies as ‘effective,' disputes he led 'never Trump' movement GOP fractured over filling Supreme Court vacancies in 2020 George W. Bush, Mitt Romney to visit Arizona to boost Martha McSally MORE (R-Utah) said he agreed with Rubio’s critique.

The criticism has put Trump on the defensive.

On Tuesday, he denied that his administration is on the cusp of a deal with China and vowed that ZTE will have to pay a massive fine.

“What I envision is a very large fine of more than a billion dollars. Could be [$1.3 billion]. I envision a new management, a new board, and very, very strict security rules,” he said during a joint press conference with South Korean President Moon Jae-in. 

“And I also envision that they will have to buy a big percentage of their parts and equipment from American companies,” Trump added.

Other GOP senators are faulting the administration for a disorganized approach.

They say Trump was wrong to threaten sanctions, causing turmoil in markets, only to pull back and declare the trade war over, before reversing course again with new threats.

“Is there a plan somewhere?” asked Sen. Pat RobertsCharles (Pat) Patrick RobertsGOP loads up lame-duck agenda as House control teeters Congress allows farm bill to lapse before reauthorization deadline Pat Robertson asks followers to help cast 'shield of protection' ahead of hurricane MORE (R-Kan.), the chairman of the Senate Agriculture Committee.

Some argue it would be more effective to fight what they see as China’s unfair trade practices through the World Trade Organization (WTO) instead of threatening seismic trade penalties only to shrink away from them when faced with retaliation.

“What I’m concerned is there seems to be a lot of ad hoc-ery going on,” said Sen. Jeff FlakeJeffrey (Jeff) Lane FlakeFlake: Congress should not continue Kavanaugh investigations Arizona congressional candidate robbed outside restaurant The Kavanaugh debate was destructive tribalism on steroids: Here’s how we can stop it from happening again MORE (R-Ariz.). “Steel tariffs — you impose them and then go to [foreign trading partners] and say ‘if you want an exemption, this is what you need to do.’ ”

“Then you end up with that ZTE debacle where you promise them some kind of relief from sanctions. We have a structure to this already. It’s called the WTO,” he added.

The ZTE fight has emerged as a flashpoint, and lawmakers grilled Mnuchin about the matter Tuesday when he testified before an appropriations subcommittee.

Sen. Christopher CoonsChristopher (Chris) Andrew CoonsDem senators urge Pompeo to reverse visa policy on diplomats' same-sex partners 15 Saudis identified in disappearance of Washington Post columnist The Senate needs to cool it MORE (D-Del.) asked why the administration is “backpedaling to make it easier” for ZTE to “operate and compete with U.S. companies.”

Sen. Jerry MoranGerald (Jerry) MoranSenate Republicans demand Google hand over memo advising it to hide data vulnerability Overnight Defense — Presented by The Embassy of the United Arab Emirates — Missing journalist strains US-Saudi ties | Senators push Trump to open investigation | Trump speaks with Saudi officials | New questions over support for Saudi coalition in Yemen Senators demand answers on Trump administration backing of Saudi coalition in Yemen MORE (R-Kan.) asked Mnuchin to “justify” administration actions related to ZTE.

Reports of divisions within Trump’s economic team have widely circulated, including a story about Mnuchin and trade adviser Peter Navarro getting into a profane shouting match on the margins of talks in China.

After Mnuchin said the trade war was on hold, White House chief economic adviser Larry Kudlow and U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerMcConnell urges GOP senators to call Trump about tariffs Companies brace for trade war MORE undercut him by claiming that tariffs are still possible.

“You cannot remove tariffs as a negotiating tool or an enforcement tool from this process,” Kudlow told CNBC’s “Squawk on the Street.” “I don’t think tariffs are over. Far from it.”

Some Republicans think that Mnuchin may be playing the role of “good cop” to Lighthizer’s “bad cop” to maximize leverage in the negotiation. But a senior GOP aide admitted this interpretation was “reading the tea leaves.”

GOP senators were unwilling to bring up their concerns on trade during a meeting last week with Trump, but frustrations are boiling over as they fear U.S. exporters are being hurt by the unpredictability of the administration’s approach. 

“I don’t think anything’s been settled yet. It’s still in the development stage. I think we have maybe too many cooks in the kitchen,” Roberts said.

“When people talk about things, they don’t realize how market sensitive it is,” he added, noting that farm commodity prices took a hit earlier this year after China threatened retaliatory measures. 

Harper Neidig and Niv Elis contributed.