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Republicans are getting anxious about the Trump economy




  Pat Toomey "title =" Pat Toomey

Republican Senator Patrick Toomey fears that trade uncertainty is contributing to an economic downturn. | Jacquelyn Martin / AP Photo

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Trump's trade war with China could undermine the GOP chances of holding the White House and Senate in 2020.

Republicans have sat patiently with President Donald Trump on his toll-coaster tour of China. Now they are starting to get worried.

Trump argues that the escalating trade war will force China to the table for a deal. But his ever-increasing tariffs – and his market-rattling tweets – are making the GOP ever more alarming.

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"There is no doubt that trade uncertainty is contributing to the decline," said Senator Pat Toomey (R-Pa.), A leading free trader. "We are in a very good place. The danger is: Where will we be a year from now if trade concerns continue to be an annoyance to growth?"

Especially when the global economy cools, important Republicans say new taxes Almost all Chinese goods threaten to rely on the president's good news: a growing economy, rising wages and low unemployment, and that could have major effects on Republicans' tough task of defending the Senate and the White House in 2020.

"The biggest risk to the economy is the whole trade situation," Senator Ron Johnson (R-Wis.) added in an interview. "I think the president did a good job, we stopped carrying out the regulatory burden, we have a more just tax system. and the entire trade war has led to a tremendous dose of uncertainty and instability. "

Most Republicans have countered Trump's protectionist tendencies for ideological reasons as well as for the hit for the economy and their own political fortunes. But they have made an exception to China given its economic rivalry with the United States. Now his customs regime for Chinese, European and North American imports has slowed economic growth and increased household costs, according to the Congressional Budget Office.

In the midst of a conversation by Trump about new tax cuts to tempt the economy, his own political party is cool for the idea. Instead, the GOP senators are urging the president to sign new trade agreements with Japan and the United Kingdom and intensify efforts to push the US-Mexico-Canada-Canada agreement through Congress.

Republicans like Toomey also advise the White House to embrace modest renewals of expiring tax regulations to counter a slowdown in business investment.

flexibility in China.

"The administration must be prepared to cut tariffs in order to get a good deal," said Senator Rob Portman (R-Ohio), a former U.S. trade representative. "And there has been some disagreement about this in the administration. Some say they should step down and others say we should keep them. I don't think you will get a good deal if you do."

Trump has to a large extent, put his re-election on his economic prowess, so any downfall could limit the way back to the White House and undermine the GOP effort to hold the Senate majority.

"An economy that slows down can be a political threat. down to 1 percent in the 2020 election, it's the same as a recession politically, "said Douglas Holtz-Eakin, president of the Center-Right American Action Forum and a former CBO director. “You grow 1.8 percent? You're back to Obama territory. You can't survive it. "

For Republicans who have run for re-election," at what point is it better for you to separate yourself from the president as opposed to riding his capes? "Holtz Eakin added.

White House spokesman Judd Deere said the president is just trying to" level the playing field for American workers "and downplayed the fear of a decline, citing the current expansion.

" It is clear that the president's policy of fair and mutual trade, along with lower taxes and deregulation, works, "Deere said.

Any Trump economic impetus will quickly fall on the vulnerable GOP senators who hold the keys to the Senate majority. Susan Collins & # 39; Maine has seen China's lobster turnover plummet; farmers in Joni Ernst's Iowa have had a brutal year.

"Everyone recognizes that the economy is good, but they are still troubled by their own circumstances," said a Republican official working on the Senate race "I'm nervous about people losing patience and starting to see results."

The GOP is keen to give markets a view of security, and Republicans are open to brainstorming ways to stabilize the economy on. Some encourage the White House to index capital gains for inflation; others advise on a simple focus on passing the USMCA.

House Speaker Nancy Pelosi (D-California) has so far resisted voting on the new North American trade agreement despite support for the pact among some swing district Democrats. That may not come at all while Trump is President given Pelosi's demand to strengthen labor and environmental standards in the deal.

"It would be great to have the USMCA done this year. But it won't surprise me at all if it happens in the next administration," the rep said. Don Beyer (D-Va.).

Pelosi stopped former trade deals under President George W. Bush, but Republicans argue a repetition of this tactic would be more difficult with her majority largely relying on pro-trade Democrats.

"It's an unsustainable position for them to continue to block it," Portman said. “The USMCA is convenient. At some point you have to let people vote. "

Congress has taken some steps to keep the economy humming, raising its debt ceiling and passing a two-year budget deal that is likely to help avoid a government shutdown by the end of September. Some Senate Republicans are also eager to adopt a long-term transportation bill, and members of both parties want to vote on legislation aimed at reducing health care.

GOP leaders have not made any firm decisions on this fall's agenda. Collins said she has personally asked Senate Majority Leader Mitch McConnell (R-Ky.) To prioritize a bipartisan health care package and make the Senate's focus on legislation rather than nominees.

Others dive into the geopolitics of Trump's conflict with China. Portman urges White House officials to develop an international coalition to isolate China, while Senator Steve Daines (R-Mont.) Travels to China next week to discuss trade with the country's leaders.

Trump has alternated between calling Chinese President Xi Jinping "the enemy" to show "great respect" for him. He has ordered US companies to move out of China before tracking back, saying a few days later that he is likely to "have a deal" with Beijing.

And some Republicans say the fight with China is worth the short-term pain. [19659008] “Do I like customs rates as a policy on any given day? No. What other options do you have for rebalancing what has now been 30 years of cheating, lying, stealing and injustice on behalf of the Chinese? "Said Senator Marco Rubio (R-Fla.).

For months, Republicans have agreed that Trump has the right to take on China even when they opposed his tariffs on allies. But their patience is not infinite.

Some blame the White House trade adviser, Peter Navarro, who has pushed a hard line against China, claiming the economy will remain strong.

“I don't think Peter Navarro understands the instability of what he promotes. [And what] his trade war shoots into the economy, "Johnson said.

The concern among free traders is that China's one-party system can wait for Trump and avoid political consequences. It's something the White House and Republicans simply can't do with a choice in 14 months.

"I give the President credit for confronting China for the very bad behavior they have engaged in. I am not sure this is the best tactic," Toomey said. "The Chinese have the capacity to endure for a very long time."

Heather Caygle contributed to this report.


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