Republicans think Trump is losing trade war

President TrumpDonald John TrumpTeachers union launches 0K ad buy calling for education funding in relief bill FDA head pledges 'we will not cut corners' on coronavirus vaccine Let our values drive COVID-19 liability protection 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 MnuchinTeachers union launches 0K ad buy calling for education funding in relief bill What Trump's orders will and won't do for payroll taxes, unemployment benefits No signs of breakthrough for stalemated coronavirus talks 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 RubioChina sanctioning Rubio, Cruz in retaliatory move over Hong Kong The Hill's Morning Report - Presented by Facebook - Negotiators signal relief bill stuck, not dead PPP application window closes after coronavirus talks deadlock  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 SasseSasse responds to Trump: 'America doesn't have kings' Trump calls for college football season to go forward The Hill's 12:30 Report - Trump's coronavirus executive orders stirs debate 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 HatchBottom line Senate GOP divided over whether they'd fill Supreme Court vacancy  Five takeaways as panel grills tech CEOs 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 RobertsMcConnell goes hands-off on coronavirus relief bill The Hill's Campaign Report: COVID-19 puts conventions in flux  The Hill's Morning Report - Presented by the Air Line Pilots Association - Virus bill unlikely to pass this week 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 FlakeCheney clashes with Trump Sessions-Tuberville Senate runoff heats up in Alabama GOP lawmakers stick to Trump amid new criticism 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 CoonsWary GOP eyes Meadows shift from brick-thrower to dealmaker On The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS Senators introduce bill to block Trump armed drone sale measure 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) MoranTrump tests GOP loyalty with election tweet and stimulus strategy VOA visa decision could hobble Venezuela coverage As ADA anniversary nears, lawmakers express concern about changes to captioned telephone service 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 LighthizerGOP senator warns quick vote on new NAFTA would be 'huge mistake' Pelosi casts doubt on USMCA deal in 2019 Pelosi sounds hopeful on new NAFTA deal despite tensions with White House 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.