The following article by Erica Werner, Heather Long and David J. Lynch was posted on the Washington Post website January 24, 2018:
President Trump imposed tariffs on imported residential washing machines and solar powered products on Jan. 23. (The Washington Post)
Prominent Republicans warned President Trump on Wednesday against taking further trade actions that could harm American workers, even as top administration officials meeting in Davos, Switzerland, rose to the defense of the president’s “America First” rhetoric on the eve of his arrival.
The blowback came as Trump moved this week to impose tariffs on imported solar panels and washing machines, incurring fierce criticism in the United States, where experts said such a move would cost jobs, and abroad, where at least one major maker of washing machines notified U.S. retailers that it would raise prices.
In Washington, at least half a dozen Republican senators condemned Trump’s decision — his first tariff action — exposing GOP divisions over international trade that threaten the uneasy alliance between the president and lawmakers of his own party.
“I don’t agree with it. I think it’s a bad path to head down,” Sen. Roy Blunt (R-Mo.) said of the tariff decision. “The retaliatory tariff fight is never a good fight, and I generally think we need to be more positive about our trade opportunities.”
Republicans are drafting a letter to Trump putting those concerns on record. The lawmakers said the tariffs could start a trade war that would damage the U.S. economy and threaten jobs, hurting the American workers Trump says he wants to help.
The lawmakers also cautioned the administration to move carefully as it renegotiates the North American Free Trade Agreement — with a sixth round of talks involving U.S., Canadian and Mexican trade officials underway this week in Montreal.
The tariffs and uncertain nature of NAFTA discussions have stoked fears among GOP lawmakers that Trump will follow through on threats to withdraw the United States from the trade pact.
NAFTA enjoys wide support among Republicans lawmakers, and before Trump, the party was largely united in favor of free trade.
Now some Democrats are closer to the president on trade than members of his own party. Sen. Sherrod Brown (D-Ohio) applauded this week’s decision on tariffs and said he had been dismayed when Trump delayed decisions about whether to impose restrictions on steel and aluminum imports.
The handling of NAFTA, in particular, holds the potential to create ongoing friction between Trump and Capitol Hill Republicans, because GOP leaders and rank-and-file Republicans in both chambers widely support the trade pact.
Although some Republicans are becoming more outspoken, others are treading carefully to avoid getting crosswise with a president who has shown no compunction in attacking lawmakers from either party when they oppose him. But if the threat of withdrawing becomes more immediate, GOP criticism is likely to become increasingly public and pointed.
Commerce Secretary Wilbur Ross, who joined a substantial U.S. delegation to the annual gathering of political and business leaders in Davos, defended the president’s tariff actions. He told foreign leaders alarmed at what they see as the rise of made-in-America protectionism that the U.S. trade moves are the same as other countries make every day.
“Trade wars are fought every single day,” Ross said. “A trade war has been in place for quite a little while. The difference is the U.S. troops are now coming to the ramparts.”
In Montreal, meanwhile, U.S., Canadian and Mexican trade officials haggled over a proposed rewriting of NAFTA.
Canadian negotiators are hoping to appeal to Trump’s hatred of red tape to revive the stalled talks, proposing several ways to reduce the regulatory burden the treaty places on the auto industry, according to David MacNaughton, Canada’s ambassador to the United States.
The Republican lawmakers made their concerns public as the South Korean electronics giant LG announced that it plans to increase the price of washing machines in response to the new import duties.
“As a result of the trade situation, we will be initiating pricing actions, which will be sent under separate cover shortly,” Thomas Yoon, a vice president at LG, said in a memo sent to the company’s retail partners.
LG’s decision to increase prices seemed to confirm some economists’ predictions that new trade barriers would ultimately result in higher prices for consumers, as manufacturers increase prices to compensate for the extra cost associated with having to pay the tariffs.
Trump’s decision comes as a growing number of companies are appealing to the administration for help against competitors. The Commerce Department initiated 79 tariff investigations in 2017 at the request of U.S. companies, reflecting a 65 percent jump over the previous year. The Commerce Department has also moved to bring more tariff actions on its own.
Opinions on NAFTA are well-defined among most GOP senators: They support it strongly, although some allow that there is room for improvement.
“I think withdrawing from NAFTA would be a disaster,” said Sen. John Thune (R-S.D.). “We’ve made that clear.”
Other Republicans noted that their states had done well out of the trade agreement with Canada and Mexico.
“There’s a lot of us that come from states that are big beneficiaries of NAFTA, as an example, and it’s important that we have a NAFTA or NAFTA-like agreement, and the president understands that. Having said that as always he wants a better deal, I support him in that regard, but we don’t want a collapse of NAFTA overall,” said Sen. James E. Risch (R-Idaho).
Sen. Mike Rounds (R-S.D.) said he was planning to sign the letter being circulated among Senate Republicans on Wednesday. It expresses concern to the White House about the tariff decisions on washing machines and solar panels.
“I understand what the administration’s trying to do — they’re trying to send a message. And at the same time, we want them to be very careful in terms of causing problems for organizations that are trying to do business in the United States who might still get hit with tariffs on their products,” Rounds said.
GOP lawmakers have spent months trying to persuade Trump to temper his “America First” trade approach, and they vowed Wednesday to continue trying to get him to hold off on major changes.
But their campaign of persuasion faces the obstacle that Trump campaigned for the presidency on a strictly protectionist platform, pledging to pull out of an unreformed NAFTA and to punish China and other U.S. competitors for unfair trade practices.
Trump believes that NAFTA and other trade agreements made it easier for other countries to sell their products in the United States in a way that destroys U.S. manufacturing through those countries’ use of cheap labor and low prices.
In Trump’s first year in the White House, advisers pushing other priorities managed to parry his eagerness to keep his campaign promises to the “forgotten men and women” who blame U.S. trading partners for the closed factories and ruined communities of the industrial heartland. With the passage last month of a $1.5 trillion tax cut, the decks are clear, and the president is asserting himself in the realm of global commerce.
“It’s the transition from bark to bite,” said William Reinsch, a veteran trade analyst at the Center for Strategic and International Studies. “They spent the past year talking about all the stuff they were going to do, but they didn’t do any of it. Now conditions are coming forward for them to do it.”
The tariffs on washing machines and solar panels are widely expected to be just the beginning of the president’s trade actions this year. U.S. Trade Representative Robert E. Lighthizer is preparing recommendations for U.S. action against China over its aggressive campaign to vacuum up U.S. trade secrets.
Citing national security, the administration also is mulling potential action against imports of steel and aluminum. Such measures might invite similar action by other countries.
The tariff actions found Trump administration officials in Davos fighting back hard against global perceptions that the United States is anti-globalization and against free trade.
“This is about an America-first agenda, but America first does mean working with the rest of the world,” Treasury Secretary Steven Mnuchin said in a news conference Wednesday morning.
Among attendees at Davos, there is a view that Trump’s protectionist rhetoric is causing the United States to lose it leadership role in shaping global trade deals.
Ross argued that the president was showing true leadership by shaking up what is not working.
“We don’t intend to abdicate leadership, but leadership is different from being a sucker and being a patsy,” Ross said. “We would like to be the leader in making the world trade system more equitable and more fair to all of the participants.”
But resetting the world’s perception of Trump is likely to be difficult. Thousands of protesters are gathered in Zurich, the closest major town to Davos, with signs reading “Trump not welcome.”
Some world leaders chimed in as well.
Indian Prime Minister Narendra Modi did not mention the United States by name, but his lengthy defense of globalization was widely seen as directed at Trump.
“The forces of protectionism are raising their heads against globalization,” Modi said Tuesday. “Their desire is to not only save themselves from globalization, but to reverse the natural flow of globalization altogether.”
Canadian Prime Minister Justin Trudeau went further, opening his speech Tuesday by announcing that Canada had finalized a major trade deal with 10 countries in the Asia-Pacific region. The agreement Canada forged was a revised version of the Trans-Pacific Partnership, from which Trump withdrew the United States a year ago.
Long reported from Davos. Aaron Gregg, Damian Paletta and Mike DeBonis contributed to this report.
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