Republicans balk at Trump tariff proposal in rare pushback

Trump’s successes of 2017 — slashing regulations on US industry, hard-won tax cuts and soaring consumer confidence — won plaudits among conservatives like House Speaker Paul Ryan.

But Trump’s aggressive plan to punish trade abusers by slapping global steel and aluminum import tariffs on friend and foe alike has not just startled the US automobile industry and other corporations that rely on international commerce, it sent shivers through Republican lawmakers, whose party has traditionally embraced free trade.

Leading the split with Trump was Ryan himself, who warned on Tuesday that the president should take “smarter” steps against bad actors, instead of imposing broad tariffs that could end up hitting US consumers.

While there was “clearly abuse occurring” regarding overcapacity, dumping and trans-shipping, particularly by China, protectionist measures could have the “unintended consequences” of a trade war, Ryan told reporters.

“I think the smarter way to go is to make it more surgical and more targeted” than broad tariffs, he said.

Trump triggered alarm last week when he announced he would sign off on measures designed to protect US producers, then defiantly swatted back at global critics by saying trade wars are “good, and easy to win.”

Some in Trump’s inner circle were supportive, including economist Peter Navarro and Commerce Secretary Wilbur Ross.

Despite a revolt among key Republicans in Congress, Trump remained defiant.

“We’re not backing down,” he said of the measures he intends to impose, including 25 percent tariffs on steel imports and 10 percent on aluminum.

– ‘We have concerns’ –

Republicans in addition to Ryan appeared caught off guard.

“We have concerns,” said Senator Bob Corker, who as chairman of the Senate Foreign Relations Committee is acutely aware of Washington’s relationships with its allies.

House Republican Warren Davidson, who helped run his family’s manufacturing business in Ohio before winning a seat in Congress, tweeted back at the president to slam his “bad tariff plan.”

Uniform tariffs, he argued, only result in “uniting others who will retaliate against America. Instead, targeted actions could work for America.”

Senate Finance Committee chairman Orrin Hatch, one of the longest serving Republicans in Congress, said he believed Trump was “shooting one across the bow and letting people know that we’re not being treated fairly in these international matters.”

As Hatch opened a committee hearing Tuesday he revisited the issue.

“These tariffs are not a tax on foreign steel and aluminum producers, but rather a tax on American citizens and businesses,” Hatch said.

“Truly, there is a better way to address China’s actions,” he cautioned, adding that he had written a letter to Trump expressing his concern.

Trump’s proposal came as US officials headed to Mexico City for negotiations on reforming the North American Free Trade Agreement.

The president threatened NAFTA trade partners Canada and Mexico in a tweet, saying the tariffs would “only come off if [a] new and fair” multilateral trade deal was signed.

Some Republicans suggested Trump was merely using the tariff threat as leverage.

“This may well be a negotiating approach,” Kevin Brady, chairman of the powerful House Ways and Means Committee, told CNBC.

Even so, Brady said he hoped Trump would “tailor this action” so it goes after trade violators like China instead of close US allies.