(Bloomberg) — There are signs of growing frustration among GOP lawmakers with Donald Trump as he moves forward with new trade tariffs, though they’re not ready to rein in the president’s power.
House Speaker Paul Ryan, who rarely directly criticizes Trump, said tariffs “are not the solution,” and warned that pulling out of trade pacts — as the president did with the Trans-Pacific Partnership — threatens the U.S. economy. But the most searing comments came later in the day from Senator Jeff Flake, an Arizona Republican who isn’t running for re-election and is often critical of the president.
“Protectionism is something he’s come back to like a homing pigeon,” Flake told reporters. “I mean, there are very few principles that he sticks with and that’s one of them.”
The Senate on Wednesday overwhelmingly approved a symbolic motion backing a role for Congress in requiring tariffs on national security grounds, such as those Trump imposed on steel and aluminum imports and is considering on autos. That came after the administration’s latest threat to impose tariffs on $200 billion of Chinese-made products on top of levies in effect, or soon to be implemented, on $50 billion of goods.
But many Republicans have said they want to give Trump leeway to see if his approach works, or persuade him privately to back down, instead of restricting his power to impose tariffs. Republicans’ desire to act may grow in coming weeks if the tariffs, and retaliatory measures, begin to increase consumer prices ahead of November’s congressional elections that will determine control of the House and Senate.
Flake said he thinks it’ll take another month for GOP lawmakers to approve legislation as Trump’s approach fails.
“Anybody who’s looking for some genius behind this curtain somehow is going to be disappointed,” Flake said. “I don’t know why my colleagues think there’s something behind that curtain. There just isn’t.”
Tariffs aren’t taking much of a toll on the economy — so far. A lull in U.S. consumer inflation in June may prove temporary, as tariffs begin to take effect. The latest round of China tariffs would boost the by as much as 0.6 percent within a year, according to Ian Shepherdson of Pantheon Macroeconomics.
The impact of earlier tariffs on washing machines is already showing in a pocket of the CPI data. The index for laundry equipment was up 13.1 percent from a year earlier, a record in figures going back to the 1970s, though its effect on the broader CPI is negligible.
Farm Impact
Farm states, which overwhelmingly supported Trump in the 2016 election, are poised to take a hit. China slapped tariffs on a variety of American farm goods that went into effect earlier this month in retaliation for Trump’s duties.
A U.S. Agriculture Department report released Thursday, the first that takes account of recent tariffs on American farm goods forecast that soybean stockpiles will be 51 percent higher next year than had been expected a month earlier as China cuts imports and Brazil gobbles up market share.
The expected drop in the price of , the second-most-valuable U.S. crop, would translate to a loss of almost $3.2 billion for soybean farmers. It could be more if the trade war escalates and addition tariffs are imposed.
Economic concerns are starting to weigh on lawmakers.
No Plan
At a Foreign Relations Committee hearing on tariffs Thursday, Senators said they couldn’t understand the administration’s trade strategy or how it plans to obtain improved trading terms with other countries.
“It is pretty apparent we don’t have a stated plan from a marketing or business standpoint,” said Senator Johnny Isakson, a Georgia Republican. “We are going to be in a terrible situation because we don’t have a plan.”
Senator Bob Corker, a Tennessee Republican who is chairman of the committee, said tariffs imposed on steel and aluminum on national security grounds are disrupting supply chains and hurting businesses. Trump’s threat to impose similar tariffs on autos would do even more damage, he said.
“I’m very concerned about the president’s trade policies and I think we all should be,” said Corker, who isn’t running for re-election and is often critical of Trump. “Many Americans could and will lose their jobs.”
House Financial Services Chairman Jeb Hensarling, a Texas Republican, questioned Trump’s trade policies in an interview on Bloomberg Television. He said the U.S. shouldn’t impose tariffs on auto imports on national security grounds.
“Why are we picking a fight with the whole world?” Hensarling said
Ryan, speaking Thursday at the Economic Club of Washington, D.C., drew a stark difference between his vision for trade and that of Trump.
“We risk having American products locked out of new markets, jobs moved overseas, and a decline in American influence,” said Ryan, a Wisconsin Republican. “As our generals will tell you, these agreements are just as important for our national security as they are for our economy.”
A bipartisan bill unveiled this week in the House would require congressional review of any tariffs proposed on national security grounds. Ryan, however, said such legislation isn’t going to pass and that it’s “more effective and constructive” to work with the administration.
Source: Investing.com
