Trump pulls out rug from GOP on trade

Senate Republicans feel that President TrumpDonald John TrumpSenators demand more details from Trump on intel watchdog firing Overnight Health Care: Trump steps up attack on WHO | Fauci says deaths could be lower than first projected | House panel warns federal stockpile of medical supplies depleted | Mnuchin, Schumer in talks over relief deal Trump says he'll look into small business loan program restricting casinos MORE has once again pulled the rug out from under them on trade, leaving GOP lawmakers frustrated over their inability to influence the White House’s policy on an issue that could have major economic and electoral ramifications. 

Days after a group of Republican senators relayed to Trump at a White House meeting their concerns about trade tensions with Canada, Mexico, Europe and China, Trump over the weekend threatened new tariffs on China, escalating a fight with Beijing and rattling markets. 

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 said after the stock markets closed Monday that higher tariffs on China will take effect Friday, shortly after negotiations with a trade delegation from China are due to resume later this week. Lighthizer’s remarks are likely to rattle markets after they recovered most of their losses Monday afternoon as Wall Street strategists cautioned that Trump’s tough talk is a negotiating tactic and a deal with China is still possible.

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The controversy over trade has come amid economic data released recently that demonstrates the U.S. economy is booming, which Republicans will lean into in the 2020 election. But some Republicans are worried that Trump’s actions on trade could boomerang and harm the economy.

News that Trump could impose tariffs on another $200 billion of Chinese goods came as a surprise to Senate Republicans who felt that bellicose posture flew in the face of what senior administration officials had told them about the talks’ progress.

Asked if anything was resolved at last week’s meeting with Trump, Sen. John CornynJohn CornynLawmakers announce legislation to fund government purchases of oil GOP senator: National shelter-in-place order would be an 'overreaction' Lawmakers already planning more coronavirus stimulus after T package MORE (R-Texas), a member of the Finance Committee, responded, “no,” adding that the president did not appear receptive to the entreaties of GOP lawmakers.

“It wasn’t necessarily a welcome message, but nothing was decided,” Cornyn said of the pleas from Senate Republicans for Trump to rein in his tariff policy.

Trump firmly stood by his penchant for slapping penalties on trade partners as an effective negotiating tool, even after GOP allies voiced concerns about the potential impact on the economy.

“He made clear that he liked tariffs as an instrument to bring people to the negotiating table,” Cornyn said. 

Other Republican senators who attended the meeting characterized it as a “debate” where neither side gave much ground.

Trump told GOP lawmakers that he didn’t think the Chinese would agree to what he would consider a good trade agreement unless Chinese officials felt the market for their exports to the United States was under serious threat, according to sources familiar with the meeting.

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The GOP lawmakers raised the prospect of the Senate moving legislation to limit Trump’s tariff authority through competing proposals sponsored by Sens. 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.) and Rob PortmanRobert (Rob) Jones PortmanPhase-four virus relief hits a wall GOP senator to donate 2 months of salary in coronavirus fight Senators pen op-ed calling for remote voting amid coronavirus pandemic MORE (R-Ohio), that would either require Congress’s approval to impose tariffs or empower lawmakers to reject future tariffs through disapproval resolutions.

The lawmakers urged Trump to repeal tariffs on Canada and Mexico and to hold off on placing trade barriers on automobiles, which would hurt Republican states with auto-manufacturing facilities, such as Indiana, Texas, Tennessee, Kentucky and Alabama. 

Lighthizer, who attended last week’s meeting with GOP senators, and Treasury Secretary Steven MnuchinSteven Terner MnuchinOvernight Health Care: Trump steps up attack on WHO | Fauci says deaths could be lower than first projected | House panel warns federal stockpile of medical supplies depleted | Mnuchin, Schumer in talks over relief deal House Republicans, key administration officials push for additional funding for coronavirus small business loans On The Money: Mnuchin, Schumer in talks to strike short-term relief deal | Small businesses struggling for loans | Treasury IG sends Dems report on handling of Trump tax returns MORE had told GOP lawmakers that negotiations with China were progressing well. 

So it came as a surprise Sunday when Trump threatened to raise tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent and slap fees on an additional $325 billion in Chinese products.

Trump’s threat went in the opposite direction of what GOP lawmakers were hoping. 

One Senate GOP aide said ahead of the meeting that lawmakers hoped to convince Trump to wind down the 25 percent tariff he had placed on a first tranche of $50 billion in Chinese products, which the administration has signaled it plans to keep in place for the foreseeable future.

Portman, who was in the White House meeting with Trump last week, said he wasn’t expecting the latest threat against China, even though he wasn’t shocked either.

“I wasn’t surprised, but I also wasn’t expecting it. It’s not like he said he was going to do that,” Portman said of Trump’s ominous trade tweets.

Trump’s bombshell tweet raised concerns that it would prompt Chinese Vice Premier Liu He to cancel a trip to Washington this week for what was expected to be a pivotal round of talks. 

The stock markets rebounded losses Monday after it was reported that the Chinese visit was still on.

Sen. Martha McSallyMartha Elizabeth McSallyGraham backs Trump, vows no money for WHO in next funding bill Trump considering suspending funding to WHO Campaigns face attack ad dilemma amid coronavirus crisis MORE (R-Ariz.), who could face a tough reelection race in 2020, said she is “hopeful” that Trump will be able to reach a “breakthrough” with China soon. 

“I’m generally a free and fair trader and I was hopeful for a breakthrough on this, and I still am, but we do have to address the national security threat and the technology transfer and intellectual property issues that are very serious,” she said, referring to several sticking points in the negotiations.

Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleySenators demand more details from Trump on intel watchdog firing Democrats target Ernst in bid to expand Senate map Zoom, grocery delivery, self-isolation: How lawmakers are surviving coronavirus MORE (R-Iowa) says he has a simple message for the president: “We don’t want auto tariffs and he’s got to take the tariffs off Mexico and Canada.”

But Grassley told reporters Monday that Trump didn’t give any ground to his and his colleagues’ concerns.

“I do come to the conclusion, though, that they’re still concerned about the trans-shipment of steel from China to Canada to the United States,” Grassley said when asked about the president’s response to pressure to drop tariffs on Canada and Mexico.

Grassley, who last June labeled Trump’s trade moves “a big gamble” that could net big wins for the country or be “catastrophic,” said he has received conflicting information on the status of trade talks.

The Iowa senator published an op-ed in The Wall Street Journal last week warning that the Finance Committee might not take up Trump’s new trade deal with Canada and Mexico, known as USMCA, unless Trump scrapped tariffs on those two major trading partners.

“If these tariffs aren’t lifted, USMCA is dead. There is no appetite in Congress to debate USMCA with these tariffs in place,” he wrote.

Jordain Carney contributed.