GOP to step up pressure on Trump as trade war intensifies

GOP to step up pressure on Trump as trade war intensifies
© Greg Nash

Frustrated Republican lawmakers plan to step up pressure on President TrumpDonald John TrumpUS-Saudi Arabia policy needs a dose of 'realpolitik' Trump talks to Swedish leader about rapper A$AP Rocky, offers to vouch for his bail Matt Gaetz ahead of Mueller hearing: 'We are going to reelect the president' MORE to back off from his aggressive trade policies, which have cast a shadow over the U.S. economy, hurt farmers and prompted some companies to curtail domestic manufacturing.

Senior administration officials promised Republican senators from agriculture-dependent states last month that they would be able to wrap up negotiations with Canada and Mexico, two of the United States’s biggest trade partners, by Labor Day. But that timeline is starting to slip. GOP lawmakers are worried about the effect on domestic manufacturers and commodity prices when the fall harvest arrives amid the home stretch of the midterm elections.

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Lawmakers will be closely watching the outcome of Wednesday’s meeting between Trump and European Commission President Jean-Claude Juncker, who is traveling to the nation’s capital to head off a full-blown transatlantic trade war.

“We’re trying to figure out tactically what’s the right step forward,” said Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyNSA improperly collected US phone records in October, new documents show Overnight Defense: Pick for South Korean envoy splits with Trump on nuclear threat | McCain blasts move to suspend Korean military exercises | White House defends Trump salute of North Korean general WH backpedals on Trump's 'due process' remark on guns MORE (R-Pa.), who is working with colleagues to rein in Trump’s trade policies.

About a dozen Republican senators met last week to discuss how to stop Trump from moving forward with new rounds of tariffs that could stall what has been consistent economic growth so far this year.

“I think there’s likely to be a group of senators who go over one more time, very soon, to talk to them about reconsidering what they’re doing,” said 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.), who has teamed up with Toomey on a bill that would give Congress authority over the president’s power to impose tariffs.

Republican senators have been lobbying the president for months to ease off his threat of tariffs but have little to show for it.

The economy has only gained momentum this year, with growth projected to hit 3.8 percent or higher in the second quarter.

But Republicans on Capitol Hill worry that once the effects of a trade war show up in the macroeconomic numbers, it will be too late to repair the damage as companies will have already moved manufacturing overseas and commodities markets will have signed contracts with other exporters.

German auto manufacturer BMW, which has a major plant in Spartanburg, S.C., announced this month that it would increase production in China in response to Trump’s tariff policies.

Wisconsin-based motorcycle manufacturer Harley-Davidson announced in June that it would move production overseas to avoid retaliatory tariffs from the European Union.

Yet, Trump’s poll numbers remain strong, and he appears immune to pressure to soften his aggressive policies.

Administration officials argue that now’s the perfect time to take on China, the European Union and other partners over what they see as unfair trading practices, when the U.S. economy is humming.

The S&P 500 is up 31 percent since Trump beat Democratic nominee Hillary ClintonHillary Diane Rodham ClintonMatt Gaetz ahead of Mueller hearing: 'We are going to reelect the president' What to expect when Mueller testifies: Not much McConnell challenger faces tougher path after rocky launch MORE in the 2016 election.

“This is the time. You know the expression: We’re playing with the bank’s money,” Trump told CNBC in an interview Friday. 

The president upped the ante last week by threatening tariffs on more than $500 billion worth of Chinese goods.

Experts warn that Trump’s trade policies may wind up taking a significant bite out of corporate profits and growth.

JPMorgan Chase CEO Jamie Dimon told CNN Money in an interview published Monday that Trump could wind up erasing the stimulative effect of last year’s tax-reform package.

“If you do another $200 billion of tariffs and this national security thing about cars, I think that you’re getting pretty close to reversing some of the benefits you’ve seen in the economy,” he said.

Larry Fink, the CEO of BlackRock, warned last week the stock market could drop 10 to 15 percent and gross domestic product could dip in 2019 unless Trump pulls back on tariffs.

GOP leaders are concerned as well.

“Any uncertainty over the trade issue or retaliatory tariffs can definitely be a wet blanket on our economic recovery,” said Senate Majority Whip John CornynJohn CornynGOP wants commitment that Trump will sign budget deal Hillicon Valley: Trump seeks review of Pentagon cloud-computing contract | FTC weighs updating kids' internet privacy rules | Schumer calls for FaceApp probe | Report says states need more money to secure elections Senators introduce legislation to boost cyber defense training in high school MORE (R-Texas).

Sen. John ThuneJohn Randolph ThuneGOP rattled by Trump rally GOP wants commitment that Trump will sign budget deal Poll: McConnell is most unpopular senator MORE (S.D.), the chairman of the Senate Republican Conference, also worries that Trump’s tariff threats could eclipse the economic benefit from his tax and regulatory policies.

“I hope we don’t distract from that with issues like tariffs and trade. I think that has a potential to step on a lot of the economic progress that we made, and I’m hoping the president and his team will come to that conclusion,” he said.  

The Senate voted overwhelmingly, 88-11, this month to pass a nonbinding resolution expressing support for Congress taking back tariff authority from the president.

The proponents of that measure want to pass legislation with more teeth limiting Trump’s authority before the end of the year.

Corker says if Trump moves ahead with tariffs on auto imports it would change the political calculus among Republicans in Congress.

“Definitely,” he said. “It would be a tipping point.”

Corker says he is looking for a revenue bill on which to attach a trade-related measure.

GOP legislators think Trump’s controversial embrace of Russian President Vladimir Putin could make colleagues more sympathetic about passing trade legislation to help NATO allies.

“The question is whether it may have moved some sentiment in our direction,” Toomey said.

Corker says a smart way to counter Russian influence is for Congress to “take back this power on tariffs, which has unsettled all of our allies.”

Republican members of the Senate Finance Committee, led by Sen. Rob PortmanRobert (Rob) Jones PortmanFighting the opioid epidemic: Congress can't just pass laws, but must also push to enforce them The Hill's Morning Report - Presented by JUUL Labs - House to vote to condemn Trump tweet Rising number of GOP lawmakers criticize Trump remarks about minority Dems MORE (R-Ohio), are also looking at legislation that would narrow the national security justification Trump has used under Section 232 of the Trade Expansion Act to impose tariffs.

Corker and Sen. Jeff FlakeJeffrey (Jeff) Lane FlakeFlake urges Republicans to condemn 'vile and offensive' Trump tweets Flake responds to Trump, Jimmy Carter barbs: 'We need to stop trying to disqualify each other' Jeff Flake responds to Trump's 'greener pastures' dig on former GOP lawmakers MORE (R-Ariz.) say that doesn’t go far enough.

But Corker, Toomey and their allies have more work to do to convince the GOP leadership to schedule a vote on legislation that would undercut Trump’s negotiating ability.

Cornyn says the passage of the nonbinding resolution is enough for now.

“I think we had a vote on some element of that,” he said, when asked about a vote on new legislation to curtail Trump’s tariff authority.