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

Senate Republicans are pressing President TrumpDonald John Trump Former US ambassador: 'Denmark is not a big fan of Donald Trump and his politics' Senate Democrats push for arms control language in defense policy bill Detroit county sheriff endorses Booker for president 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 KudlowLawrence (Larry) Alan 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 JohnsonGOP senator: Gun control debate 'hasn't changed much at all' back home GOP senators call for Barr to release full results of Epstein investigation FBI Agents Association calls on Congress to make 'domestic terrorism' a federal crime 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 LighthizerRobert (Bob) Emmet LighthizerOn The Money: Economy adds 164K jobs in July | Trump signs two-year budget deal, but border showdown looms | US, EU strike deal on beef exports Chinese, US negotiators fine-tuning details of trade agreement: report The Trump economy keeps roaring ahead MORE and Treasury Secretary Steven MnuchinSteven Terner MnuchinTrump says he'll decide on foreign aid cuts within a week Democrats push judge for quick action on Trump tax returns lawsuit Five key players in Trump's trade battles 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 GrassleyCharles (Chuck) Ernest GrassleyWhite House denies exploring payroll tax cut to offset worsening economy Schumer joins Pelosi in opposition to post-Brexit trade deal that risks Northern Ireland accord GOP senators call for Barr to release full results of Epstein investigation 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) TesterNative American advocates question 2020 Democrats' commitment House Democrats targeting six more Trump districts for 2020 Budget deal sparks scramble to prevent shutdown 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 RobertsKobach says he's more prepared for 'propaganda' in Senate campaign Pompeo: Senate run 'off the table' Grassley gambles on drug price bill despite GOP doubts 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 ThuneSchumer blasts 'red flag' gun legislation as 'ineffective cop out' Lawmakers jump-start talks on privacy bill Trump border fight throws curveball into shutdown prospects 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 BartiromoPresident tweets 'few work harder' than Ivanka, Jared GOP lawmakers press Trump to cut deal with China at G-20 The Hill's Morning Report - Warren cements front-runner status in first Dem debate 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.