Trump antagonizes both parties on trade

BY NIV ELIS - 05/31/19

https://thehill.com/policy/finance/446407-trump-antagonizes-both-parties-on-trade

President Trump is facing fire from all sides following his decision to impose new tariffs on exports from Mexico unless that country curbs illegal immigration into the United States.

Republicans caught off guard by the surprise move said it went beyond Trump’s authority and warned it would imperil the new U.S.-Mexico-Canada Agreement (USMCA) on trade that the White House is pressing Congress to approve.

“Following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump’s and what could be a big victory for the country,” Sen. Chuck Grassley (R-Iowa), the chairman of the Senate Finance Committee, said shortly after the announcement on Thursday.

Grassley, whose committee holds jurisdiction over trade, called the move a “misuse of presidential tariff authority."

Sen. Joni Ernst (R-Iowa) said if Trump went through with the tariffs, scheduled for introduction on June 10, “I'm afraid progress to get this trade agreement across the finish line will be stifled.”

Democrats also ripped Trump’s decision, arguing it was devoid of strategy and all about theater and the news cycle.

“This is yet another stunt by a president who chooses showmanship over strategy and plays dangerous games with the livelihoods of American workers and consumers,” said House Majority Leader Steny Hoyer (D-Md.), who warned that the tariffs would hit auto workers particularly hard.

Democrats were also annoyed by a second move Trump made on Thursday, which ended up being overshadowed by his Mexico tariffs surprise.

Hours before Trump announced through Twitter that he would impose escalating tariffs on Mexican exports, he pulled a power move on Speaker Nancy Pelosi (D-Calif.) by triggering a 30-day countdown clock on congressional consideration of the USMCA.

Pelosi and Democrats had wanted to continue to address issues in the deal related to enforcement of labor laws before triggering the clock.

The Speaker said the move was “not a positive step” and that “it indicates a lack of knowledge on the part of the Administration on the policy and process to pass a trade agreement.”

House Ways and Means Committee Chairman Richard Neal (D-Mass.) said that Democrats would not budge based on Trump’s pressure tactics.

“The timeline for the consideration of a renegotiated NAFTA will be determined by the completion of the work that remains to be done by Democrats and Ambassador [Robert] Lighthizer to address these concerns,” he said. 

“The premature submission of a draft statement of administrative action has no impact on that outstanding work or the timeline moving forward,” he added.

Trump has reveled in challenging Washington protocols, particularly on trade. He’s argued that leaders in both parties have negotiated a series of poorly crafted trade deals that have hurt American workers and sent U.S. jobs overseas.

Such arguments were a key part of his appeal in 2016 to many blue-collar workers, and Trump became the first GOP nominee in decades to win several Rust Belt states.

Republicans, particularly those representing farm communities, have frequently been at odds with Trump over tariffs.

Yet during the recent fight with China, most in the GOP have rallied around the president. In that case, they shared a hatred of Beijing’s economic policies. Even Democrats such as Senate Minority Leader Charles Schumer (D-N.Y.) offered some praise for a tough line with China.

Mexico, a U.S. ally, is a much different situation — particularly with the president imposing tariffs on a trading partner not because of a trade dispute but because of immigration.

Several Republicans also warned that the tariffs would end up hurting their local economies.

Sen. Martha McSally (R-Ariz.), who is up for reelection in 2020 in an increasingly purple state, noted that Mexico is her state’s top trade partner.

“While I support the President's intention of stopping unchecked illegal immigration, I do not support these types of tariffs, which will harm our economy and be passed onto Arizona small businesses and families,” she said.

Pennsylvania Republican Sen. Pat Toomey, called Trump’s threats “misguided” and said the tariffs were “a dangerous and risky economic tool.”

Across the aisle, Rep. Nydia Velázquez (D-N.Y.), who chairs the House Small Business Committee excoriated Trump for the proposed tariffs.

“As the President has yet again failed to understand — increasing tariffs means placing unnecessary taxes on the backs of American workers and small businesses,” she said.

Democratic Gov. Michelle Lujan Grisham from neighboring New Mexico called on Trump to retract his proposal.

“The president is threatening the employment of tens of thousands of New Mexicans whose livelihoods and families absolutely depend on a mutually beneficial relationship with our neighbors to the south,” she said. “These tariffs have the potential to be economically catastrophic.”

There were also concerns about how Mexico could retaliate, targeting U.S. exporters. Kenneth Smith, Mexico's former top trade negotiator, tweeted that the U.S. could expect a “stratospheric” response from Mexico.

The Dow Jones Industrial Average dropped 355 points Friday, or 1.4 percent, returning to a level it first reached in the opening days of 2018.

In response to the criticisms, the Trump White House laid the blame at Congress’s feet.

“Frankly, Congress should actually fix the laws and we wouldn’t have this problem,” White House press secretary Sarah Huckabee Sanders told reporters Friday. “Unfortunately, the president’s the only one that’s actually stepping up and putting forward things to stop it.”

Trade adviser Peter Navarro repeated the false talking point that American consumers would not be affected by the tariffs on Mexico and China.

“The government of China and Mexico will pay for it and the producers in Mexico and China pay for this,” he said on CNBC.

One study found that Trump’s tariffs and their retaliations were already costing U.S. households an average of $831 a year.

Tariffs Hurt the Heartland, an anti-tariff advocacy group, has calculated that a 20 percent tariff “would wipe out about $95 billion, or 0.5 percent, from GDP annually.”

Brett Samuels and Rafael Bernal contributed.