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GOP lawmakers press Trump to cut deal with China at G-20

Senate Republicans are pressing President TrumpDonald TrumpIran claims U.S. to lift all oil sanctions but State Department says 'nothing is agreed' Ivanka Trump, Kushner distance themselves from Trump claims on election: CNN Overnight Defense: Joint Chiefs chairman clashes with GOP on critical race theory | House bill introduced to overhaul military justice system as sexual assault reform builds momentum MORE to strike a trade deal with China or to at least make significant progress at the Group of 20 (G-20) summit in Osaka, Japan, where Trump will meet with Chinese President Xi Jinping.

Republican lawmakers are eager for Trump to reach an accommodation with China, or at least hold off on another round of tariffs on $300 billion on Chinese imports that would hit American consumers by raising the prices of agricultural imports, housewares and electronics.

GOP senators at a private meeting this week impressed on Trump’s top economic adviser, Larry KudlowLarry KudlowMORE, the need for a breakthrough.

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“I really hope President Trump and President Xi can put aside the differences and do what’s in the best interests of both countries,” said Sen. Ron JohnsonRonald (Ron) Harold JohnsonOvernight Defense: Joint Chiefs warn against sweeping reform to military justice system | Senate panel plans July briefing on war authorization repeal | National Guard may have 'training issues' if not reimbursed Senate panel plans July briefing on war authorization repeal Overnight Defense: Senate panel delays Iraq war powers repeal | Study IDs Fort Hood as least-safe base for female soldiers | Pentagon loosens some COVID-19 restrictions MORE (R-Wis.). “In terms of the economy, I think it’s pretty important.” 

“I think we haven’t really begun to see the true impact to our own economy,” he added. “I hope both sides will recognize the economic benefits to doing a deal. I hope both sides will be gracious to the other. Trade should be a win-win situation.”

Johnson said he delivered that message to Kudlow during a meeting with the Senate Republican Conference. 

Trump and Xi are expected to sit down together Saturday.

U.S. and Chinese trade delegations met Friday, with U.S. Trade Representative Robert LighthizerBob LighthizerBiden moves to undo Trump trade legacy with EU deal Whiskey, workers and friends caught in the trade dispute crossfire GOP senator warns quick vote on new NAFTA would be 'huge mistake' MORE and Treasury Secretary Steven MnuchinSteven MnuchinDemocrats justified in filibustering GOP, says Schumer Yellen provides signature for paper currency Biden's name will not appear on stimulus checks, White House says MORE and Chinese Vice Premier Liu He in attendance.

The U.S. and China account for almost 40 percent of global gross domestic product — 22 percent and 15 percent, respectively.

Economists warn that the global economy will slow if the trade war drags on. That, in turn, could dampen demand for U.S. products in markets around the world. 

Morgan Stanley warned in a note to clients last month that if the U.S.-China trade talks fail and Trump increases tariffs on more Chinese imports it could push the world economy into a recession.

Senate Republicans are taking those red flags seriously. 

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“What I want to see from the G-20 is China and America back at the table,” said Senate Finance Committee Chairman Chuck GrassleyChuck GrassleyBiden's program for migrant children doesn't go far enough The Hill's Morning Report - Presented by Facebook - Biden support, gas tax questions remain on infrastructure 64 percent of Iowans say 'time for someone else' to hold Grassley's Senate seat: poll MORE (R-Iowa). “Their economy is hurting, ours is slowing down. The world trade is slowing down. It might be a little bit negative right now.”

A trade deal “is going to benefit China, it’s going to benefit us — it’s going to benefit the whole world,” he added. 

But Grassley said he is not optimistic about a deal coming out of this weekend’s talks.

“All you can expect is just to get back to the table,” he said.

Democrats, meanwhile, think Trump’s trade war with China can help them increase their share of the vote in rural parts of Senate battleground states next year.

“The tariff stuff — there’s no explanation for this,” Sen. Jon TesterJonathan (Jon) TesterWhite House digs in as infrastructure talks stall White House advisers huddle with Senate moderates on infrastructure Biden risks break with progressives on infrastructure MORE (D-Mont.), a former chairman of the Democratic Senatorial Campaign Committee, said when asked what’s giving Democrats more optimism about taking back control of the Senate next year. 

“Why do I say tariffs when there are a lot of other things? Those are areas he won and he’s hurting those people the worst,” Tester said of the impact the trade war is having in rural areas of Senate battlegrounds like Montana, Iowa and North Carolina, where farming is a big part of the local economy.

Kudlow told GOP lawmakers that the most likely outcome of this weekend’s talks with China is a return to where things were in early May, before the breakdown that caused the stock markets to drop, according to senators who attended the meeting. 

“He’d like to get back to where they were in May,” said Sen. Pat RobertsCharles (Pat) Patrick RobertsEx-Sen. Cory Gardner joins lobbying firm Senate GOP faces retirement brain drain Roy Blunt won't run for Senate seat in 2022 MORE (R-Kan.), adding that Kudlow only said the outcome of the weekend talks is “to be determined.”

GOP senators say a lot is riding on averting a full-blown tariff war with the world’s second-largest economy.

“I think it would be pretty important to show some progress. There are a lot of people I know in farm country that want to see evidence that they’re making some significant headway toward a deal,” said Senate Republican Whip John ThuneJohn Randolph ThuneThe Hill's Morning Report - Presented by Facebook - GOP torpedoes election bill; infrastructure talks hit snag White House digs in as infrastructure talks stall On The Money: Democrats make full-court press on expanded child tax credit | White House confident Congress will raise debt ceiling MORE (S.D.).

“It’s good news to me that they think they’re 90 percent of the way there. I hope that’s correct, and I hope they can get the other 10 percent quickly because this prolonged dispute is having some pretty harmful economic consequences in ag country among other places,” he said. 

Republican lawmakers are especially concerned that Trump may slap a 25 percent tariff on another $300 billion in Chinese goods if the talks fall flat.

That would include hundreds of items like gloves, mittens, overcoats, shoes, sneakers, toys, cameras and wristwatches. 

“If in fact things would not go well, there’s always the threat of the president using an additional tariff and then we go down that road again. That would be most unfortunate,” said Roberts, who is concerned about Chinese retaliatory tariffs against U.S. farm exports.

Trump on Wednesday said he might place a lower tariff on the $300 billion in additional Chinese goods if the talks hit an impasse this weekend. 

“Phase two doesn’t have to be 25 percent. It could be 10 percent, which people can absolutely handle,” Trump told Maria BartiromoMaria Sara BartiromoMaria Bartiromo defends reporting: 'Keep trashing me, I'll keep telling the truth' Court sets Smartmatic dismissal date on Giuliani, Bartiromo, others The US can solve the border crisis by decoupling from China MORE of Fox News on Wednesday.

One Republican senator who requested anonymity to discuss the negotiations said those tariffs, known as “list 4,” would hit American consumers more than past rounds because of the products targeted. 

“I hope the list 4 tariffs can be avoided,” the lawmaker said of the outcome of the weekend negotiations.