Republican senators want to know if President Trump has an endgame in the escalating trade fight with China.
The fight over tariffs has sent markets into turmoil and clouded economic prospects, worrying senators ahead of the midterm elections.
Prices for soybeans, corn and wheat dropped in anticipation that China will hit U.S. exports hard if Trump goes through with a plan to impose tariffs on another $100 billion in Chinese imports.
Chinese retaliation on such crops would be felt acutely in states such as North Dakota, Missouri and Montana that are crucial Senate battlegrounds this fall.
“This is a big deal. In South Dakota we can’t afford to have that kind of loss in the markets just on speculation we might end up in a trade war,” said Sen. Mike Rounds (R-S.D.).
Worse, from the point of view of Rounds and others, is that it’s not clear where the fight is headed.
“My question, very respectfully, to the president is, ‘What’s your game plan? What’s your endgame on this?’ ” said Rounds. “I think the administration needs to be able to explain their logic on why they’re doing it this way and whether there’s any logic to it.”
Sen. Jerry Moran (R-Kan.) on Monday called on the administration to define “a solid path toward an end result in our trade negotiations with China.”
“We cannot escalate a fight between a significant purchaser of what we produce in Kansas with no real end goal,” he warned in an op-ed published in The Hill.
Senate Republican Conference Chairman John Thune (R-S.D.) said he and his colleagues are concerned about how carefully Trump has thought out his tactics.
“I don’t know that there’s a real plan or strategy in place that gets the result that they want,” he said. “It seems like this is, ‘OK, there’s a trade deficit, we know China cheats and we’re going to punish them.’ ”
“It seems to me there needs to be a lot of thought given to unintended consequences,” he added. “My impression is that hasn’t happened.”
Lawmakers representing farm states were unlikely to grow confident from the statements coming Monday from Trump and his top economic adviser, Larry Kudlow.
Trump blasted China and previous administrations for trade policies that had harmed U.S. workers and businesses, adding that U.S. farmers would “understand” if they suffered from a trade fight that might ultimately move them forward. If China sought to hurt U.S. farmers in order to hurt Trump, the president said, “I wouldn’t say that’s nice.”
But he said farmers were “patriots” who would understand.
“These are great patriots. They understand that they’re doing this for the country,” Trump said. “And we’ll make it up to them. And in the end, they’re going to be much stronger than they are right now.”
Kudlow, for his part, downplayed the trade dispute by insisting the United States wasn’t in a trade war since while tariffs have been discussed and planned, they have not been put into place.
“I don’t know if we’ll have tariffs or not,” Trump’s economic adviser told CNBC’s “Squawk on the Street.”
Trump said that farmers have been “trending downward over an eight-year period” but that, because of his actions on the North American Free Trade Agreement (NAFTA) and China, “farmers will be better off than they ever were.”
Trump’s more protectionist outlook on trade has always been a note of contention in his relationship with GOP leaders in Congress, and the recent fights have brought it into focus.
Senate Finance Committee Chairman Orrin Hatch (R-Utah) says he will hold hearings on Trump’s tariff policy but didn’t announce a date.
“My personal feeling is I wish they wouldn’t go through. I don’t think they help. I think he’s getting bad advice,” Hatch said of the proposed tariffs. “I haven’t seen tariffs work in any way over the years.”
“We’ll probably have to have hearings. You can’t just ignore it,” he said.
House Ways and Means Committee Chairman Kevin Brady (R-Texas) plans to hold hearings April 12 on Trump’s proposal to place tariffs on steel and aluminum imports.
National Republican Senatorial Committee Chairman Cory Gardner (R-Colo.), who met with Trump in January to dissuade the administration of moving ahead with tariffs and warn about the impact on Senate-battleground farm states, expressed dismay over last week’s posturing on trade.
“I don’t think tariffs are the right way to go,” said Gardner, who is charged with protecting the GOP’s Senate majority. “What we need to do is work with a coalition of nations to condemn Chinese trade practices and find a solution, but I think tariffs will hurt the very people they’re trying to help.”
Republican senators say they hope for a cooling-off period in the next several weeks and several are urging Trump to take a multi-lateral approach to trade issues with China, instead of plunging into a one-on-one exchange of retaliatory trade measures.
“There’s time for negotiation and I certainly hope those negotiations are fruitful and that we come to an agreement where China says we’re going to stop stealing [U.S.] companies blind when it comes to intellectual theft and they agree to fair trade practices,” Gardner said.
Rounds is publicly urging Trump to revive the Trans-Pacific Partnership agreement between the United States and 11 Pacific Rim countries, including Japan, Singapore and Vietnam, to gain more leverage in negotiations with China.
He said the United States should also settle its trade status with Canada and Mexico, two of its biggest partners. The both nations’ statuses are shrouded in uncertainty because of attempts to renegotiate NAFTA.
He argues that expanded access to those markets would leave U.S. exporters less vulnerable to retaliatory trade measures.
“It would be really good if we had those allies on board with us and we had working relationships with them, trade agreements with them, when we tackle the big dog, which is China,” Rounds said.
Trump pulled out of the Trans-Pacific Partnership shortly after taking office last year, vowing to negotiate bilateral trade agreements to replace it.