Republican senators expressed unease Thursday about the president’s threat of tariffs on imported automobiles during a Senate lunch with Vice President Mike Pence, amid a widening debate over contentious trade talks with a number of countries, including allies.
Senate Finance Chairman Orrin G. Hatch said the Commerce Department’s national security review of imported automobiles was “deeply misguided.”
“We’ll have to see. Probably,” the Utah Republican said, when asked whether his panel planned to raise the issue of tariffs on imported cars in a trade oversight hearing likely to be held after lawmakers return from the Memorial Day break. “Any time you start raising taxes and tariffs, I’m not very happy about it.”
Sen. Shelley Moore Capito said the senators raised those concerns in the presence of Pence.
“A lot of people are upset about it,” the West Virginia Republican said. “The vice president was there. He didn’t really respond to that.”
Pence went to the lunch hours after the administration announced it would cancel a summit meeting with North Korea over its nuclear weapons program, but several senators said imported car tariffs emerged as another hot topic during the session.
Watch: Rubio Leads Chorus of Lawmakers Critical of Trump’s Trade Talks With China
Hatch, Capito and other Republicans said they take seriously Commerce Secretary Wilbur Ross’ announcement Wednesday night of an investigation of any threat posed by imported automobiles to national security — and the nation’s defense industry sector — under Section 232 of trade expansion law. Ross said in a written statement that the probe would include cars, SUVs, vans, light trucks and automotive parts, and that decades of imports have “eroded our domestic auto industry.”
President Donald Trump launched a review of steel and aluminum imports last year that resulted in a finding by Commerce that foreign-made steel and aluminum posed economic threats to U.S. companies. The department also said U.S reliance on imported steel and aluminum could leave America unable to meet military needs for the metals.
Trump in April imposed an across-the-board 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports with temporary exemptions for Canada, Mexico and the European Union that will expire June 1 if not renewed.
The latest trade review could exacerbate the tension with key car exporters Japan, South Korea and Germany. North American Free Trade Agreement partners Mexico and Canada also export cars to the United States.
Auto tariffs “would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war,” warned Chamber of Commerce President Thomas J. Donohue, adding that Trump’s latest trade move is likely designed to pressure allies to make trade concessions.
“I am very concerned about the president abusing the authorities granted to him in Section 232 of the Trade Expansion Act of 1962,” Tennessee GOP Sen. Bob Corker said in a statement. “There is no reason to use this provision to consider imposing tariffs on the automobile industry, and this appears to be either an attempt to affect domestic politics ahead of the election or for some other transactional purpose regarding ongoing trade discussions. This is a dangerous course and should be abandoned immediately.”
Sen. Cory Gardner said after leaving the Pence lunch that many GOP senators were concerned that tariffs on imported cars could trigger retaliatory tariffs and other actions by trading partners aimed not only U.S.-made automobiles, but potentially at other goods.
“It is being discussed,” the Colorado Republican said, adding that tariffs would “backfire on those you are really trying to help” and would “raise the cost of goods and make it more difficult for American consumers.”
Fear of retaliation
Sen. Lamar Alexander echoed those sentiments. “I think this is a dangerous direction for the administration to go,” the Tennessee Republican said, adding that the administration’s trade probe could hurt a home-state constituent, Nissan, if it results in U.S. tariffs on Japanese cars and triggers retaliatory tariffs by other countries on cars made in Smyrna, Tennessee.
Alexander was one of the senators who talked about the potential unintended effect of U.S. tariffs on foreign-made cars: retaliatory tariffs on Nissan, Toyota, Honda, Mercedes, BMW, Hyundai and Kia cars made in the U.S. and sent overseas.
Sen. Rob Portman, who was U.S. trade representative under President George W. Bush, said he asked Ross in a private Capitol huddle Wednesday night on behalf of a number of GOP senators about the trade investigation.
“Honestly, I was surprised by it. I asked the secretary of Commerce about it last night, and he said that the details were forthcoming as to whether there is a basis for it or not. I don’t know enough about it yet,” the Ohio Republican said.
Treasury Secretary Steven Mnuchin joined Ross, Portman and other GOP senators for Wednesday’s huddle. The group discussed the lawmakers’ concerns about the administration’s mixed signals on potential penalties aimed at Chinese telecommunications maker ZTE for violating trade sanctions against Iran and North Korea.
Watch: FBI Director: Trump Didn’t Seek Advice Before Tweeting on ZTE
Senate Majority Whip John Cornyn, an organizer of the session with Ross and Mnuchin, said he hoped the debate over imported car tariffs would not create hurdles in the coming Senate floor debate of the defense authorization measure, which could include several trade items related to national security.
The measure includes provisions from the Texas Republican’s proposed bill that would broaden interagency reviews of cross-border deals and reshape the export control program. Export controls are managed by a group in the Commerce Department that also handles Section 232 trade investigations related to national security.
“These tariffs make me nervous because then you can retaliate in other unrelated industries like agriculture. I’m not comfortable with it,” Cornyn said.
Despite general concerns voiced by senators in both parties about trade friction with China and other countries, some lawmakers said it was too early to tell whether the threat of such tariffs would be a useful tactic in trade talks.
“We ought to look at all our trade,″ Alabama GOP Sen. Richard C. Shelby said. “Trade is a two-way street and it should be fair.” His state is home to Mercedes-Benz USA International, Honda Manufacturing of Alabama, Hyundai Motor Manufacturing Alabama and a shared Toyota-Mazda plant being built in Huntsville.
“He has us all paying attention,” South Carolina Republican Sen. Tim Scott said.
Ellyn Ferguson contributed to this report.