When lawmakers return from recess next week, they are likely to be besieged by various industries seeking protection from the economic fallout of the trade fight between the Trump administration and China that threatens to impose $50 billion in retaliatory duties on U.S. exports.
But the Republican-controlled Congress may not be able to do more than collectively wring its hands, in contrast to the leverage lawmakers have under Trade Promotion Authority to accept or reject a renegotiated North American Free Trade Agreement.
Sen. Patrick J. Toomey said some GOP members have floated the idea of slowing confirmation of administration nominees, or threatening to vote against extending Trade Promotion Authority, also known as fast track authority, which the administration has requested. The Pennsylvania Republican did not endorse either tactic.
Gary Clyde Hufbauer of the Peterson Institute for International Economics said Congress is unlikely to take action soon.
“For now the president has the upper hand,” Hufbauer said in an email. “If tariffs are imposed, and there’s real pain in the agricultural states, more Republicans will go along with delaying nominations and putting riders on appropriation bills. I can’t see killing fast track, however.”
Watch: Trump Signs Steel and Aluminum Tariffs
TPA lays out objectives a president must follow in negotiating trade pacts, but Congress cannot amend an agreement.
Any legislative action lawmakers take to counter President Donald Trump’s tariffs on 1,300 Chinese imports would go to the White House for his signature. If he vetoed the legislation, it would take a two-thirds majority vote in each chamber to override it.
Although GOP lawmakers are airing their unease, there is no indication that many want to publicly confront the leader of their party in a showdown.
Even if lawmakers acted, they could expect pushback from the White House where China’s tariff actions, especially its initial imposition of $3 billion in tariffs on 128 U.S. products, are viewed without legal basis and out of compliance with World Trade Organization rules.
A U.S. Trade Representative official told reporters in a Wednesday conference call that Beijing’s threat to impose $50 billion in tariffs on U.S. goods ranging from agriculture to Boeing Co. planes “is simply an effort, I think, to intimidate us, to get us to back down so they can continue to doing all the bad things that we outlined in our report [on China’s trade practices]. In our opinion, the appropriate response from China would be to change its behavior.”
Lawmakers have not said what specifically Congress can do to force the White House to reconsider its actions. Instead, lawmakers in tweets and through statements are urging Trump to negotiate U.S. differences with China rather than use tariffs.
Senate Majority Leader Mitch McConnell told the Shelby County Farm Bureau on Tuesday that he is concerned about the U.S. tariffs but offered no legislative response.
“I’m not a fan of tariffs, and I am nervous about what appears to be a growing trend in the administration to levy tariffs,” he added, according to the Courier-Journal in Louisville. “This is a slippery slope, so my hope is that this will stop before it gets into a broader tit-for-tat that can’t be good for our country.”
Sen. Deb Fischer tweeted on Wednesday that the president “must negotiate with the Chinese in a constructive way to get good trade results for our farmers and ranchers.”
The Nebraska Republican’s statement came after China’s Ministry of Commerce released on Wednesday a list of 106 U.S. imports, including soybeans, beef and Boeing Co. planes, that would be subject to 25 percent tariffs if the United States finalizes a list of 1,300 Chinese products on which it proposes to levy 25 percent duties. The U.S. Trade Representative’s Office released the preliminary list on Tuesday for public comment and announced a May 15 hearing to take testimony.
The Chinese threat to impose a new round of tariffs was enough to send the stock market falling in early morning trading though it rebounded later in the day. American Soybean Association President John Heisdorffer said in a statement the 2018 U.S. soybean crop lost $1.72 billion in value on the futures market because soybeans are on the list.
China buys 61 percent of U.S. soybean exports, spending $14 billion in 2016. Heisdorffer said “a 25 percent tariff on U.S. soybeans into China will have a devastating effect on every soybean farmer in America.”
He urged the Trump administration to withdraw the preliminary tariffs on Chinese imports.
GOP Sen. Charles E. Grassley of Iowa said he was frustrated with China and the Trump administration.
Grassley said in a statement that he urged Chinese officials during a congressional visit to Asia last week to end unfair trade policies and practices but thinks his words “fell on deaf ears.” He also said he told the Trump administration that U.S. agricultural exports would be early casualties in any trade fight between the United States and China.
Grassley’s state is already feeling a one-two-three punch on tariffs. On Monday, the Chinese imposed $3 billion in tariffs on 128 U.S. exports, including two top Iowa products, pork and ethanol, in response to the 25 percent duty on steel imports and 10 percent duty on aluminum imports imposed by Trump. Soybeans are another top crop in Iowa and would be affected if China follows through on its threat to move ahead with the $50 billion in additional tariffs.
“The Administration knew that if it imposed tariffs on Chinese goods, China would retaliate against U.S. agriculture. I warned President Trump as much in a White House meeting in February,” Grassley said.
Grassley, who is Senate Judiciary Committee chairman and a Senate Finance Committee member, said the federal government has a responsibility to help Americans financially injured by its actions. He said he would address those issues, but did not specify how.
Congress has a stronger hand on the North American Free Trade Agreement, which the administration is renegotiating with Canada and Mexico under the Trade Promotion Authority statute, which lays out negotiating objectives and gives Congress the right to approve or reject the final trade deal.
The Senate Finance and House Ways and Means committees have frequently reminded Trade Representative Robert Lighthizer that whatever he negotiates must please not only Trump but also Congress if a revamped NAFTA is to win approval. The committees oversee trade policy in Congress.
The status of NAFTA talks is unclear at this point. The three countries completed a seventh round of talks on March 5, but have not announced the date for the next round. There are news reports that Lighthizer is pressing Canada and Mexico to sign an agreement in principle although several contentious issues remain undecided.
Mexico’s Secretary of the Economy Ildefonso Guajardo Villarreal and Foreign Affairs Secretary Luis Videgaray are in Washington this week to meet with Trump officials about the trade talks.