McCarthy worries trade war could hurt GOP

McCarthy worries trade war could hurt GOP
© Greg Nash

House Majority Leader Kevin McCarthyKevin Owen McCarthyPence extends olive branch to Cummings after Trump's Baltimore attacks Marijuana industry donations to lawmakers surge in 2019: analysis McCarthy: Trump traveling to Baltimore shows he cares about the city MORE (R-Calif.) is banking on a strong economy helping his party in November's midterm elections — unless a burgeoning trade war sparked by tariffs implemented by the Trump administration puts the brakes on growth.

In an interview Sunday, McCarthy said strong economic data and voters’ increasingly positive views of the direction of the country were helping Republicans ahead of the midterms.

“I think the economics is why we're coming back,” McCarthy said. 

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Recent polls show Republicans only narrowly trailing Democrats in generic ballot questions that test whether one party has an edge in the race for control of Congress. An Economist/YouGov poll conducted last week showed Democrats with a slim 3-point edge. A Reuters/Ipsos poll conducted about the same time showed Democrats up just 2 points.

But some Republicans are nervous that Trump's new tariffs on steel and aluminum imports from the European Union, Canada, Mexico, China and other countries could lead to retaliatory measures from those countries that could become a drag on the economy.

Some of those retaliatory tariffs could target goods produced in California, such as almonds, walnuts and wine — products that also come from McCarthy's Bakersfield-based district. 

Republicans are already on defense in the Golden State, where they are defending seven districts that Hillary ClintonHillary Diane Rodham ClintonDershowitz: 'Too many politicians are being subject to criminal prosecution' The 13 Republicans needed to pass gun-control legislation Democrats spar over electoral appeal of 'Medicare for All' MORE won in the 2016 presidential election. If voters in those districts see a trade war impacting their bottom line, it would likely further complicate Republican efforts to maintain the majority. 

While McCarthy represents a heavily Republican district, GOP Reps. Jeff DenhamJeffrey (Jeff) John DenhamEx-GOP Rep. Roskam joins lobbying firm Ex-GOP Rep. Denham heads to lobbying firm Crazy California an outlier? No, we are the canary in the coal mine MORE and David ValadaoDavid Goncalves ValadaoCalifornia Republican ousted in 2018 announces rematch for House seat The 8 House Republicans who voted against Trump’s border wall The Hill's Morning Report — Presented by T-Mobile — The political currents that will drive the shutdown showdown MORE represent farming districts that gave Clinton more votes than Trump in 2016.

McCarthy said negotiations between the United States and its top trading partners are still playing out, and that there is plenty of time to resolve the disputes.

“I think it's still early. We've got to see how the negotiations turn out. I don't think anybody wins a trade war,” McCarthy told The Hill. “Opening up more markets is a positive thing, so we'll see how the discussion turns out.”

In a separate interview Sunday on CNN’s “State of the Union,” McCarthy said the country is not yet in a trade war.

“We're in a trade discussion to renegotiate [the North American Free Trade Agreement],” McCarthy told CNN.

Minutes later, Canada's Minister of Foreign Affairs Chrystia Freeland told CNN she did not believe the negotiations were a “discussion.” Prime Minister Justin Trudeau called the U.S. decision to impose tariffs on national security grounds “insulting and unacceptable.”

In Washington, other Republicans are sounding more strident alarms. On Monday, Sen. Bob CorkerRobert (Bob) Phillips CorkerTrump announces, endorses ambassador to Japan's Tennessee Senate bid Meet the key Senate player in GOP fight over Saudi Arabia Trump says he's 'very happy' some GOP senators have 'gone on to greener pastures' MORE (R-Tenn.) said his office was working on legislation that would limit Trump's power to implement the tariffs, though the Senate's number two Republican, John CornynJohn Cornyn The 13 Republicans needed to pass gun-control legislation The Hill's Morning Report — Biden steadies in third debate as top tier remains the same Congress set to ignore Trump's wall request in stopgap measure MORE (Texas), cast doubt on the chances of such a measure passing.

Three outside groups affiliated with the conservative Koch brothers network said on Monday they would spend millions of dollars on advertisements meant to push back against the tariffs.

McCarthy, a Trump ally, said he had spoken with the president about the dispute between the United States and some of its closest allies.

“We've talked about tariffs and free trade all year,” he said.