Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyOvernight Defense: Pick for South Korean envoy splits with Trump on nuclear threat | McCain blasts move to suspend Korean military exercises | White House defends Trump salute of North Korean general WH backpedals on Trump’s ‘due process’ remark on guns Top GOP candidate drops out of Ohio Senate race MORE (R-Pa.), a leading member of the Senate Finance Committee, is warning that President TrumpDonald John TrumpChina’s trade war trump card: The US bond market Trump renews calls for those convicted of police killings to get the death penalty Former Pentagon official calls Bolton’s approach to intel community ‘counterproductive’ MORE’s plan to provide $15 billion in assistance to farmers hurt by the escalating trade war with China is “very bad policy.”
“It’s a very bad policy,” he told a group of reporters in his office. “Think about what we’re doing. We’re inviting this retaliation that denies our farmers — the most productive farmers on the planet — the opportunity to sell their products overseas and then we say, ‘Don’t worry, we’ll have taxpayers send you some checks and make it OK.’ That’s a very bad approach.”
Trump on Monday announced his administration will provide $15 billion in assistance to farmers hurt by the escalating trade war with China, which this week increased tariffs on $60 billion in American exports.
China announced the tariffs, which will target beef, honey, rice, corn, wheat flour, spinach, peas, beans, lentils, peanut oil, soybean oil, sunflower oil and other agricultural products, in retaliation for the Trump administration raising tariffs last week on $200 billion worth of Chinese goods.
Toomey says that efforts to negotiate better trade deals by imposing tariffs on trading partners is a risky strategy, and flatly called tariffs on allies such as Mexico, Canada and the European Union a “mistake.”
“I think it’s been a mistake, with respect to steel and aluminum, with respect to the European Union, Canada and Mexico, our allies like Japan [and] South Korea. I think it has not been a productive use,” he told a small group of reporters in a briefing this week.
“I think some of these approaches should be scaled back,” he said.
Tariffs are still in place on Mexico and Canada despite the negotiation of a new trade deal known as USMCA, which awaits ratification in the House and Senate.
Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyBarr throws curveball into Senate GOP ‘spying’ probe Trump Jr. reaches deal to testify with Senate Intelligence On The Money: GOP angst grows over Trump’s trade war | Trump promises help for ‘Patriot Farmers’ | Markets rebound | CBO founding director Alice Rivlin dies | Senate to vote on disaster aid bill next week MORE (R-Iowa) warned in a Wall Street Journal op-ed that Congress wouldn’t approve the trade deal while the tariffs remain in place.
The pressure appears to have had some effect, as Trump administration officials are nearing deals with Canada and Mexico to remove the tariffs.
But the near collapse of trade talks with China last week has created a gloomy air among Republicans on Capitol Hill about the chances of securing an agreement between the world’s two largest economies anytime soon.
The S&P 500 has dropped by more than 4 percent since Trump announced on May 5 that he would increase tariffs on $200 billion of Chinese goods, a threat his administration followed up on last week.
Asked about the prospect of reaching a successful deal with China, Toomey said,
“The jury is still out.”
“I think there was a lot of progress that was made [and] that then there clearly was a big setback,” he said. “I don’t think we know whether or not that progress resumes.”
GOP lawmakers are now looking ahead to the Group of 20 summit in Japan next month, where President Trump is expected to meet with Chinese President Xi Jinping as the next significant opportunity to get talks back on track.
“Tariffs are not in and of themselves a good thing. Tariffs, at best, can be a tool that might produce good results, but they are themselves dangerous and a painful tool that hits both the country against which the tariffs are being imposed and the country that is doing the imposition,” Toomey said.
“I think the recent developments with China are illustrating this. It’s certainly true that tariffs on Chinese products can be painful for parts of China,” he added. “Although, oddly, so far Chinese imports to the U.S. have not declined, American exports to China have declined and our trade deficit with China has worsened despite these tariffs.”
Toomey is disputing Trump’s argument that the long-term imposition of tariffs can be a good thing for the United States.
“The unexpectedly good first quarter 3.2% [gross domestic product] GDP was greatly helped by Tariffs from China. Some people just don’t get it!” Trump tweeted on May 13.
On May 14 Trump tweeted, “In one year Tariffs have rebuilt our Steel Industry – it is booming! We placed a 25% Tariff on ‘dumped’ steel from China & other countries, and we now have a big and growing industry. We had to save Steel for our defense and auto industries, both of which are coming back strong!”
Toomey, however, says that American consumers are paying a price.
“We pay a price and the Chinese pay a price, while these tariffs and this trade war unfolds.”
“I have made the case directly to the president. The president doesn’t agree with my macro view on trade, it’s fair to say,” he added.
Toomey has sponsored a bill with 13 Senate co-sponsors on both sides of the aisle to rein in Trump’s tariff authority by giving Congress authority to approve future tariff increases under Section 232 of the 1962 Trade Expansion Act.
The legislation would give Congress 60 days to approve of tariffs imposed based on national security concerns under Section 232, and if no action is taken would nullify the president’s trade actions.
It would also transfer from Commerce to the secretary of Defense the authority to investigate whether imports pose a national security threat by weakening domestic industries.
Toomey’s bill is part of negotiations being spearheaded by Grassley within the Finance Committee on producing legislation to limit Trump’s tariff powers.
Grassley is also weighing a competing bill sponsored by Sen. Rob PortmanRobert (Rob) Jones PortmanThe Hill’s 12:30 Report: Alabama abortion bill revives national debate GOP senator pans Trump’s aid to farmers as ‘very bad policy’ On The Money: GOP angst grows over Trump’s trade war | Trump promises help for ‘Patriot Farmers’ | Markets rebound | CBO founding director Alice Rivlin dies | Senate to vote on disaster aid bill next week MORE (R-Ohio) that was crafted with senior administration officials that would give Congress the power to pass a disapproval resolution for controversial tariff measures.