Busi­nesses show­ing dis­con­tent with Trump’s trade poli­cies

The Saline Courier - - NEWS -

WASH­ING­TON — Pres­i­dent Don­ald Trump’s ag­gres­sive and wildly un­pre­dictable use of tar­iffs is spook­ing Amer­i­can busi­ness groups, which have long formed a po­tent force in his Repub­li­can Party.

Cor­po­rate Amer­ica was blindsided last week when Trump threat­ened to im­pose crip­pling taxes on Mex­i­can im­ports in a push to stop the flow of Cen­tral Amer­i­can mi­grants into the United States.

The two sides reached a truce Fri­day af­ter Mex­ico agreed to do more to stop the mi­grants. But by Mon­day, Trump was again threat­en­ing the tar­iffs if Mex­ico didn’t abide by an un­spec­i­fied commitment, to “be re­vealed in the not too dis­tant fu­ture.”

Such whip­saw­ing is now a hall­mark of Trump’s trade pol­icy. The pres­i­dent re­peat­edly threat­ens tar­iffs, some­times im­poses them, some­times sus­pends them, some­times threat­ens them again. Or drops them.

Busi­ness groups, al­ready un­com­fort­able with Trump’s at­tempts to stem im­mi­gra­tion, are strug­gling to fig­ure out where to stand in the fast-shift­ing political cli­mate. They have hap­pily sup­ported Trump’s cor­po­rate tax cuts and moves to loosen en­vi­ron­men­tal and other reg­u­la­tions. But the capri­cious­ness of Trump’s use of tar­iffs has proved alarm­ing.

“Busi­ness is los­ing,” said Rick Tyler, a Repub­li­can strate­gist and fre­quent Trump critic. “He calls him­self ‘Mr. Tar­iff man.’ He’s proud of it... It’s bad news for the party. It’s bad news for the free mar­ket.”

“It was a good wakeup call for busi­ness,” James Jones, chair­man of Monarch Global Strate­gies and a for­mer U.S. am­bas­sador to Mex­ico, said of Trump’s abrupt move to threaten to tax Mex­i­can goods.

Just last week, the sprawl­ing net­work led by the bil­lion­aire in­dus­tri­al­ist Charles Koch an­nounced the cre­ation of sev­eral political ac­tion com­mit­tees focused on pol­icy — in­clud­ing one de­voted to free trade — to back Repub­li­cans or Democrats who break with Trump’s trade poli­cies. A pow­er­ful force in Repub­li­can pol­i­tics, the net­work is al­ready a year into a “mul­ti­year multi-mil­lion dol­lar” cam­paign to pro­mote the dan­gers of tar­iff and pro­tec­tion­ist trade poli­cies.

The Cham­ber of Com­merce, too, is in the early phases of dis­en­tan­gling it­self from the Repub­li­can Party af­ter decades of loy­alty. The Cham­ber, which spent at least $29 mil­lion largely to help Repub­li­cans in the 2016 elec­tion, an­nounced ear­lier this year that it would de­vote more time and at­ten­tion to Democrats on Capi­tol Hill while rais­ing the possibilit­y of sup­port­ing Democrats in 2020.

Few ex­pect the Cham­ber or busi­ness-backed groups like the Koch net­work to sud­denly em­brace Democrats in a sig­nif­i­cant way. But even a sub­tle shift to withhold sup­port from vul­ner­a­ble Repub­li­can can­di­dates could make a dif­fer­ence in 2020.

Trump’s bound­less en­thu­si­asm for tar­iffs has up­ended decades of Repub­li­can trade pol­icy that fa­vored free trade. It has left the party’s tra­di­tional al­lies in the busi­ness world strug­gling to main­tain political rel­e­vance in the Trump era.

Trump’s tar­iffs are taxes paid by Amer­i­can im­porters and are typ­i­cally passed along to their cus­tomers. They can pro­voke re­tal­ia­tory tar­iffs on U.S. ex­ports. And they can par­a­lyze busi­nesses, un­cer­tain about where they should buy sup­plies or sit­u­ate fac­to­ries.

“Know­ing the rules helps us plan for the fu­ture,” said Jeff Sch­wa­ger, pres­i­dent of Sar­tori, a cheese com­pany that has had to con­tend with re­tal­ia­tory tar­iffs in Mex­ico in an ear­lier dis­pute.

Trump seems un­fazed. My­ron Brilliant, head of in­ter­na­tional af­fairs at the U.S. Cham­ber of Com­merce, went on CNBC on Mon­day to de­cry “the weaponiza­tion of tar­iffs” as a threat to the U.S. econ­omy and to re­la­tions with trad­ing part­ners.

Trump re­sponded by phon­ing in to the net­work to de­clare “I guess he’s not so brilliant” and de­fend his trade poli­cies.

“Tar­iffs,” he said, “are a beautiful thing.”

Trump can afford to be con­fi­dent about his grip over the party: Roughly nine in 10 rank-and-file Repub­li­cans sup­port his per­for­mance as pres­i­dent, ac­cord­ing to the lat­est Gallup polling. So Repub­li­cans in Congress have been re­luc­tant to tan­gle with him.

But last week’s flareup over the Mex­ico tar­iffs may prove to be a piv­otal junc­ture. The spat was es­pe­cially alarm­ing to busi­nesses be­cause it came seem­ingly out of nowhere. Less than two weeks ear­lier, Trump had lifted tar­iffs on Mex­i­can and Cana­dian steel and alu­minum — ac­tion that seemed to sig­nal warmer com­mer­cial ties be­tween the United States and its neigh­bors.

“This re­ally came out of left field,” said Daniel Ujczo, a trade lawyer at Dick­in­son Wright. “It was some­thing we thought we had set­tled, and we hadn’t.”

Congress was al­ready show­ing signs of wari­ness, es­pe­cially over Trump’s de­ci­sion to dust off a lit­tleused pro­vi­sion of trade law to slap tar­iffs on trad­ing part­ners. Sec­tion 232 of the Trade Ex­pan­sion of 1962 lets the pres­i­dent im­pose sanc­tions on im­ports that he deems a threat to na­tional se­cu­rity.

Trump has de­ployed that pro­vi­sion to tax im­ported steel and alu­minum. And he’s threat­en­ing to im­pose Sec­tion 232 tar­iffs on auto im­ports, a chilling threat to Amer­i­can al­lies Ja­pan and the Euro­pean Union.

Congress is con­sid­er­ing bi­par­ti­san leg­is­la­tion to weaken the pres­i­dent’s au­thor­ity to de­clare na­tion­alse­cu­rity tar­iffs. In doing so, law­mak­ers would be re­assert­ing Congress’ au­thor­ity over trade pol­icy, es­tab­lished by the Con­sti­tu­tion but ceded over the years to the White House.

The leg­is­la­tion has stalled in Congress this spring.

But on Tues­day, Iowa Repub­li­can Chuck Grass­ley, chair­man of the Se­nate Fi­nance Com­mit­tee, said the bill would be ready “pretty soon.” Given “how the pres­i­dent feels about tar­iffs,” Grass­ley said, “he may not look fa­vor­ably on this. So I want a very strong vote in my com­mit­tee and then, in turn, a very strong vote on the floor of the Se­nate.”

Con­gres­sional re­luc­tance to challenge Trump could be tested in com­ing months. Law­mak­ers may balk if he pro­ceeds with plans to tax $300 bil­lion worth of Chi­nese goods that he hasn’t al­ready tar­geted with tar­iffs — a move that would jack up what con­sumers pay for ev­ery­thing from bi­cy­cles to bur­glar.

Like­wise, tax­ing auto im­ports — an idea that has vir­tu­ally no sup­port out­side the White House — would likely meet fu­ri­ous re­sis­tance. So would any move to aban­don a trade pact with Mex­ico and Canada. Trump has threat­ened to with­draw from the 25-year-old North Amer­i­can Free Trade Agree­ment if Congress won’t rat­ify a re­vamped ver­sion he ne­go­ti­ated last year.

For all their dis­en­chant­ment with Trump, the Cham­ber of Com­merce may yet find it hard to break its ties to the party. Though the cham­ber says it’s weigh­ing a more bi­par­ti­san ap­proach, it re­cently featured a sign on its front steps: It likened Trump to Repub­li­can icons Ronald Rea­gan and Dwight Eisen­hower.

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