[CTC] Republicans Pose Growing Challenge to Trump’s Trade Agenda

[Arthur Stamoulis]

https://www.wsj.com/articles/republicans-pose-growing-challenge-to-trumps-trade-agenda-1489337570 <https://www.wsj.com/articles/republicans-pose-growing-challenge-to-trumps-trade-agenda-1489337570>
Republicans Pose Growing Challenge to Trump’s Trade Agenda

GOP lawmakers warn that imposing tariffs may result in stiff retaliation

William Mauldin and Jacob M. Schlesinger
Updated March 12, 2017 2:24 p.m. ET 
WASHINGTON—Republican lawmakers are showing increasing resistance to President Donald Trump’s trade agenda, worried that his plans could hurt exports from their states and undermine longstanding U.S. alliances.

The concerns indicate that the biggest threat to Mr. Trump’s trade policy—which emphasizes new bilateral deals and a tougher stance against countries blamed for violating trade rules—is coming from his own party. The opposition from Republicans, who control both chambers of Congress, stands to complicate Mr. Trump’s efforts to overhaul the North American Free Trade Agreement, or Nafta, and tackle alleged trade violations in China.

“We want to support him on all those things; we’re not there yet,” said Sen. Jim Inhofe (R., Okla.), whose state depends on aerospace and agricultural exports.

While many Democrats in Congress are interested in working with the Trump administration on trade, Republicans who have long backed free trade—many of them close to business groups—are warning that imposing tariffs could lead to retaliation against U.S. goods. Lawmakers from farm states are upset that Mr. Trump in January pulled out of the unratified Trans-Pacific Partnership, or TPP, the 12-nation trade agreement that Barack Obama negotiated.

“I’m more concerned about what they might do renegotiating existing agreements than what they do bilaterally with countries they don’t have agreements with,” said Sen. Chuck Grassley (R., Iowa), a member of the committee that oversees trade. “We know what we have, and I guess I don’t think it’s as bad as what the president thinks it is,” he said, citing Nafta, which opened markets for farm exports.

Mr. Trump rode a wave of economic discontent to the White House, threatening to undo traditional U.S. trade policy and challenging the orthodoxy of Republican lawmakers who have long backed freer trade.

Since then, few members of the president’s party—or allied big business groups—have challenged him openly on the issue. Many are eager to cooperate with the White House on high-priority goals they share—notably overhauling Mr. Obama’s health-care law, and cutting corporate taxes—and don’t want to offend the new administration during fractious debates over those polices, congressional aides say.

But as the administration’s trade agenda moves forward on several fronts, lawmakers are voicing their reservations. Those concerns are expected to be on display this week as the Senate Finance Committee grills Robert Lighthizer, Mr. Trump’s nominee for U.S. Trade Representative.

“My concern is that they’re making it too difficult to enter into trade agreements,” said Sen. Cory Gardner (R., Colo.). “I’m concerned that when we remove ourselves from the playing field of multilateral opportunities, our trading partners will look elsewhere for leadership—and that leadership can come from countries that don’t follow the same norms and values that we do,” he added, alluding to China’s attempts to fill the void in Asia following the U.S. withdrawal from the TPP.

Mr. Trump recently sent to Congress a trade policy agenda  <https://www.wsj.com/articles/trump-administration-trade-policy-expected-to-seek-diminish-wto-authority-in-the-u-s-1488330361>that backs an aggressive reliance on rarely used U.S. law to punish trading partners and questions the authority of the Geneva-based World Trade Organization as an arbitrator of international disputes. House Republicans who oversee trade issues fired back a strong statement backing the WTO and existing U.S. agreements.

Also, House Speaker Paul Ryan (R., Wis.) in December raised objections  <https://www.wsj.com/articles/water-bills-buy-american-provision-sparks-some-gop-concerns-1480709387>to legislation that would require the use of American-made steel in U.S. water infrastructure projects.

Mr. Trump’s pledge to renegotiate Nafta is expected to provide an early test of congressional support for his policies. U.S. lawmakers took note when a Mexican lawmaker introduced legislation favoring Latin American products over American-exported corn, a key winner in Nafta. That move followed warnings from Mr. Trump that Nafta would be renegotiated and Mexico would have to pay <https://www.wsj.com/articles/trump-moves-shake-deep-u-s-mexico-relationship-1485389932> for a new border wall.

“I have been worried because other countries have pushed back: ‘You want us to build a wall, well we’re not going to take your corn,’” said Sen. Joni Ernst, an Iowa Republican. “If we’re talking about renegotiating Nafta, we actually stand to lose ground in agriculture—so we would really have to work that very, very carefully.”

If Mr. Trump follows through on threats to raise tariffs “it could cause some dire economic consequences,” said Utah Republican Sen. Mike Lee. “I hear about it constantly when I talk to people throughout my state.” Mr. Lee, who has long backed a greater role for Congress, this year introduced a bill that would strip the president of powers to impose tariffs without congressional approval.

Congress has grown more polarized on trade in recent years, with Democrats allied with labor unions critical of Nafta and other deals.

Sen. Sherrod Brown (D., Ohio), who began working with Mr. Trump and his advisers a few days after the November election, says he is concerned congressional Republicans may get in the way.

“I’m worried that it’s going to be an ongoing fight between the president and his promises on the one hand, and Republican leadership, who are usually in the tank with companies,” Mr. Brown said.

Others say they are waiting to see just what measures the Trump trade team will actually implement, and who will prevail among his diverse group of advisers who range from hard-liners advocating a sharp turn, to finance leaders steeped in the advantages of globalization.

“Honestly there has been some inconsistency,” said Sen. John Cornyn (R., Texas), a member of the Senate Republican leadership as well as the committee overseeing trade. “Some of the rhetoric has been a little jarring, but what really counts is what they do.”

Write to William Mauldin at william.mauldin at wsj.com <mailto:william.mauldin at wsj.com> and Jacob M. Schlesinger at jacob.schlesinger at wsj.com <mailto:jacob.schlesinger at wsj.com>
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