WASHINGTON — President Donald Trump’s trade warwith three of America’s largest trading partners — Mexico, Canada and China — has unnerved congressional Republicans who worry about their constituents paying higher prices on goods and a broader downturn in the U.S. economy.
Stock markets plunged this week as Trump’s across-the-board tariffs took effect and China announced retaliatory levies on U.S. goods, including on exports from red states that supported the president. A total of $3.4 trillion in value was wiped out since the November presidential election.
“I think the tariffs will be a disaster,” Sen. Rand Paul (R-Ky.) warned in an interview with HuffPost on Tuesday. “We still have a significant amount of inflation lurking around. Now we’re going to get price increases on top of that.”
Sen. Chuck Grassley (R-Iowa) suggested he would be seeking an exemption for his state, which is a leading producer of corn, soybeans and pork in the United States. Farmers in Iowa and other states rely heavily on Canadian potash, a key fertilizer ingredient, for their crops.
“Potash coming from Canada would be 25% higher,” Grassley said. “I assume I’m going to hear from farmers to contact the secretary of commerce to try to get a waiver.”
Trump initially threatened the tariffs on Canada and Mexico during his presidential campaign and announced he would be going forward with them last month, saying they were necessary to prevent drug trafficking across U.S. borders. Trump then delayed the levies for one month after Canada and Mexico announced new border security measures, which most Republicans saw as a positive sign that could ultimately take the threat off the table.
But the White House said Monday that Canada and Mexico “have failed to adequately address the situation” and that Mexican drug traffickers were operating unhindered thanks to a relationship with the Mexican government. Canadian Prime Minister Justin Trudeau later vowed to retaliate with more tariffs, calling Trump’s actions “very dumb.” Mexican President Claudia Sheinbaum also said Mexico would detail its own retaliatory tariffs on Sunday.
The deepening trade war generated lots of anxiety on Capitol Hill, where Republicans agreed with Trump’s aims but said they hoped the tariffs would end soon, while Democrats tore into the administration for needlessly antagonizing allies and hiking prices on consumers.
Rep. Glenn Thompson (R-Pa.), chair of the House Agriculture Committee, said he believed Canada and Mexico had already stepped up border security. Canada had announced a $1 billion border security plan that included new helicopters, while Mexico said it would deploy 10,000 national guardsmen.
“I’m not sure what additional, like — the 25% tariffs of Canada — they’ve really stepped up. So has Mexico, actually, on the border. But I’m not a part of those negotiations, so I don’t know exactly what the president is trying to extract additionally,” Thompson told HuffPost.
The farm sector exports a lot of produce and is uniquely vulnerable in a trade war. When Trump imposed tariffs on Chinese imports during his first term, and the Chinese government retaliated with tariffs on U.S. exports in kind, the Trump administration bailed out agriculture producers with nearly $30 billion worth of direct payments.
Thompson said if there’s another protracted trade war, the government would once again help out farmers.
“I’m hoping that we won’t find ourselves in a situation of sustained retaliatory tariffs on our farmers. If we are, we’ll be prepared to deal with that.” he said.
Sen. Tommy Tuberville (R-Ala.) said the immediate negative effects of tariffs on farmers would ultimately be mitigated by his goal of securing the U.S. borders.
“There’ll be some effect early but you got to take the bad with the good,” Tuberville said. “No way around it. We did it last time and, of course, the farmers suffered a little bit early and then President Trump helped them out in the long run.”
Trade protectionism has long been contrary to the Republican Party’s longstanding affection for free markets. Economists say consumers ultimately bear the burden of tariffs because the importers who pay the tax can recover the cost through higher prices. Erica York, an economist with the conservative Tax Foundation, said Monday Trump’s latest round of tariffs will amount to “the largest U.S. tax hike since 1993.”
Most Republicans in Congress, however, either said Trump’s tariffs were a good idea or offered only muted criticism. Former Sen. Pat Toomey (R-Pa.) offered a more pointed criticism on Tuesday.
“With his multiple rounds of tariffs, and the inevitable retaliations, President Trump has wiped out all of the S & P 500 and Nasdaq 100 gains since his election. Next come higher prices and job losses,” Toomey wrote in a post on social media.
Democrats said Trump had broken his campaign promise to lower prices that helped get him elected and castigated Republicans for not doing more to push back against his economic policies.
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“Donald Trump is waging economic terrorism against American families,” Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, said in a statement.
“Trump promised to lower prices. Instead, he is jacking up the costs of groceries, gas, power and electronics,” he added. “The U.S. auto industry will be devastated. American farmers and exporters are already seeing their markets evaporate and jobs destroyed as a result of Trump’s senseless trade war. Republicans have the power to bring this price-hiking spree to a halt, but I have no confidence they’ll put their constituents ahead of Trump.”