Republican senators give Pence an earful on trade

A group of Senate Republicans warned Vice President Pence at a lunch meeting Tuesday that farm states face a dire situation as President TrumpDonald John TrumpNASA exec leading moon mission quits weeks after appointment The Hill's Morning Report — After contentious week, Trump heads for Japan Frustration boils over with Senate's 'legislative graveyard' MORE struggles to close trade deals with Mexico, Canada and China. 

Growing anxiety over the direction of Trump’s trade policies spurred a major selloff on Wall Street, with all three major stock indexes losing more than 2 percent before paring some losses ahead of Tuesday’s closing bell.  

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GOP senators expressed concern that the new trade deal Trump negotiated with Mexico and Canada appears stalled because of congressional opposition and that a long-anticipated agreement with China could still be weeks away, with an escalation of the trade war likely in the meantime. 

“We want to see these deals done,” said Sen. Joni ErnstJoni Kay ErnstSenate defense bill would make military sexual harassment standalone crime Congress, White House near deal on spending, debt limit Trump mulling visit to ethanol refinery later this month: report MORE (R-Iowa), who told reporters she raised the issue of trade and tariffs with Pence. “Really push Pelosi. Let’s see the China deal done.” 

Speaker Nancy PelosiNancy PelosiThe Hill's Morning Report — After contentious week, Trump heads for Japan Frustration boils over with Senate's 'legislative graveyard' Trump-Pelosi fight threatens drug pricing talks MORE (D-Calif.) has threatened to prevent a House floor vote on the U.S.-Mexico-Canada Agreement (USMCA), an updated version of the North American Free Trade Agreement (NAFTA), unless Trump reopens negotiations to strengthen labor and environmental protections. 

Ernst said her warning about the impact on farmers “was echoed by many members across the Midwest.” 

“We need to see it done soon,” she said. “The confidence back home is shaky. Folks are hurting.” 

Another Republican senator in the meeting said there is growing concern that Trump may threaten to pull out of NAFTA to exert leverage on his negotiating partners and that such a move could backfire.  

The lawmaker said colleagues told Pence that leaving NAFTA should be off the table. 

“A statement was made that we can’t afford to withdraw from NAFTA in the absence of USMCA,” said the GOP lawmaker, who requested anonymity. “It’s been my concern that in the absence of a lot of pressure that the president would just withdraw from NAFTA, period.”

The lawmaker said senators warned the vice president that “farmers and ranchers are hurting and there are pockets of this country where the economy is not strong.”

GOP senators also pressed Pence on the state of trade talks with China, which were previously expected to wrap up by the end of this week. 

Now it looks like the negotiations will drag on for several more weeks, and U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerChinese, US negotiators fine-tuning details of trade agreement: report The Trump economy keeps roaring ahead Trump says no discussion of extending deadline in Chinese trade talks MORE announced Monday that the Trump administration will raise tariffs on $200 billion worth of Chinese goods on Friday.

That threat alarmed farm-state senators, who worry that China will retaliate by hitting U.S. agricultural exports. Farmers in those states are already hurting because of low commodity prices and, in some areas, recent natural disasters.

Lighthizer made his announcement late Monday afternoon, and markets plunged when they opened on Tuesday morning. 

The Dow Jones Industrial Average plummeted more than 600 points, or 2.3 percent, while the S&P 500 Index fell 2.3 percent and the Nasdaq dropped 2.2 percent before recovering slightly before the closing bell. 

Among “farm-state senators there’s deep concern because of the farm economy,” said Sen. Mike BraunMichael BraunOn The Money: Senate passes disaster aid bill after deal with Trump | Trump to offer B aid package for farmers | House votes to boost retirement savings | Study says new tariffs to double costs for consumers Senate passes disaster aid bill after deal with Trump Pence, McConnell eulogize Sen. Richard Lugar MORE (R-Ind.), who described problems of oversupply and low prices. 

“Tariffs just pile on,” he said. 

Sen. Kevin CramerKevin John CramerTrump pushing for GOP donor's company to get border wall contract: report The Hill's Morning Report - Trump says no legislation until Dems end probes Bolton emerges as flashpoint in GOP debate on Iran MORE (R-N.D.) said Pence received the message. 

“We all want him to know — and he does — and the president to know that our farmers are on thin rope right now,” Cramer said. 

Senate Agriculture Committee Chairman Pat RobertsCharles (Pat) Patrick RobertsWomen's civil rights are not a state issue The Hill's 12:30 Report: Tough questions await Trump immigration plan Pat Robertson: Alabama 'has gone too far' with 'extreme' abortion law MORE (R-Kan.) said farmers are running out of patience with Trump’s protracted trade talks, which have resulted in retaliatory tariffs against U.S. agriculture exports.

“I’m not where the president is with regards to the good use or the proper use of tariffs,” Roberts said. “We always take it first in agriculture. There’s a lot of feeling in farm country that we’re being used as pawns in this whole business.” 

China has levied tariffs ranging from 5 percent to 25 percent on more than 800 U.S. food and agriculture products, according to a Congressional Research Service report published earlier this year. 

Pence, however, did not give any ground in the meeting, sticking firmly to Trump’s hard-line policies. Trump has told senators he thinks that stance is necessary to strike favorable deals. 

Pence told senators that “the president means business with China and he’s not blinking,” according to Cramer. 

Tuesday’s meeting followed a tense gathering with GOP senators and Trump at the White House last week when they raised their concerns with the president’s trade policies, which GOP lawmakers worry could weaken the economy. 

Senate Majority Whip John ThuneJohn Randolph ThuneFrustration boils over with Senate's 'legislative graveyard' Hillicon Valley: Assange hit with 17 more charges | Facebook removes record 2.2B fake profiles | Senate passes anti-robocall bill | Senators offer bill to help companies remove Huawei equipment Senate passes anti-robocall bill MORE (R-S.D.) said Tuesday that GOP senators had little luck when they pressed Trump to ease up on tariffs. 

“We delivered the message last week to the president,” he said. “Our members were very plain and clear. I think the president has his own very strongly held views about the role that tariffs play in trying to get some of these countries to the table and good deals negotiated.” 

Pence told senators on Tuesday that Trump remains optimistic about reaching an agreement with China and explained that the president has had to play tough to get the best possible agreement. 

“I think we got pretty close and I think then they backed off with a couple of provisions, and so the president acted to get back to the table on those provisions,” Roberts said. 

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GOP lawmakers also voiced displeasure to Pence over the stalled disaster relief package that has left farmers in the Midwest and South anxious. 

Senate Appropriations Committee Chairman Richard ShelbyRichard Craig ShelbyThe Hill's Morning Report — After contentious week, Trump heads for Japan On The Money: Senate passes disaster aid bill after deal with Trump | Trump to offer B aid package for farmers | House votes to boost retirement savings | Study says new tariffs to double costs for consumers Senate passes disaster aid bill after deal with Trump MORE (Ala.), the lead Republican negotiator on the disaster aid bill, said he had a “candid” conversation with acting White House chief of staff Mick MulvaneyJohn (Mick) Michael MulvaneyOn The Money: Judge rules banks can give Trump records to House | Mnuchin pegs debt ceiling deadline as 'late summer' | Democrats see momentum in Trump tax return fight | House rebukes Trump changes to consumer agency House rebukes Mulvaney's efforts to rein in consumer bureau The Hill's Morning Report - Pelosi remains firm despite new impeachment push MORE earlier Tuesday over the lack of progress on disaster relief. 

The package has been held up for weeks because of Trump’s staunch opposition to providing more aid to Puerto Rico — a funding boost backed by Democrats. 

“The conversation I had with Mulvaney was candid,” Shelby told reporters, recounting a discussion that took place shortly before Tuesday’s lunch. 

Asked if “candid” was another way of describing the conversation as tense or heated, Shelby just laughed. 

“I was candid, and he was too about the whole situation,” he said. “This was the longest I remember a big disaster bill hadn’t been resolved.” 

When asked if Mulvaney was holding up progress on the bill, Shelby paused for several seconds before answering, “I don’t know.” 

“If you’re looking for blame, there’s a lot of blame for not having something to go all around. But I think what we got to do is get beyond that,” he said. “How do we solve this? How do we work this out?”