McCarthy worries trade war could hurt GOP

McCarthy worries trade war could hurt GOP
© Greg Nash

House Majority Leader Kevin McCarthyKevin Owen McCarthyTop Trump ally says potential Amash presidential bid could be problematic in Michigan Ocasio-Cortez on concentration camp remarks: Liz Cheney, GOP 'manipulating pain for political purposes' GOP rep: Trump needs to retaliate against Iran to deter other hostile nations 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 ClintonBiden to debate for first time as front-runner Top Trump ally says potential Amash presidential bid could be problematic in Michigan Chaotic Trump transition leaks: Debates must tackle how Democrats will govern differently 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. Denham heads to lobbying firm Crazy California an outlier? No, we are the canary in the coal mine Polling editor says news outlets should be more cautious calling elections MORE and David ValadaoDavid Goncalves ValadaoThe 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 Rep. Valadao officially concedes in California race 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 CorkerPress: How 'Nervous Nancy' trumped Trump Amash gets standing ovation at first town hall after calling for Trump's impeachment Jeff Daniels blasts 'cowardice' of Senate Republicans against Trump 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 CornynDemocrats give Trump trade chief high marks GOP senators divided over approach to election security GOP lawmakers want Mulvaney sidelined in budget talks 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.