Leading Republicans in the Senate are dismayed. They fear that making foreign steel and aluminum more costly to U.S. buyers could cause other countries to slap tariffs on U.S. imports in retaliation. That's the opposite of the free-trade policies Republicans tend to champion, which in its truest form has no restrictions.
During President Barack Obama's final year, it was Republicans in Congress who were trying to help get a free-trade deal, the Trans-Pacific Partnership, over the line. (Blue-collar Democratic voters and powerful Democratic institutions tend to be wary of such deals.) The TPP effort failed, and Trump officially ended that deal when he came into office.
Republicans criticizing their president isn't new — but this is one of the party's first major policy disagreements, at least one that doesn't stem from the president's indecision. Here, unlike the debate on protecting “dreamers” or Trump's vagaries on gun policy, we know where the president stands. He thinks tariffs are good policy. And top Republicans very much disagree with his position.
In a remarkable statement, Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) — one of Trump's most steadfast allies during the tax debate — said this amounts to a tax hike on Americans:
“Tariffs on steel and aluminum are a tax hike the American people don’t need and can’t afford. I encourage the president to carefully consider all of the implications of raising the cost of steel and aluminum on American manufacturers and consumers.”
Sen. Ben Sasse (R-Neb.) simply called this bad policy:
“Let's be clear: The President is proposing a massive tax increase on American families. Protectionism is weak, not strong. You'd expect a policy this bad from a leftist administration, not a supposedly Republican one.”
Making imported steel and aluminum more expensive, Republicans argue, will make all of the products that rely on such imports more expensive. U.S. car companies have warned that the last time there were such tariffs, in 2002, they lost hundreds of thousands of jobs. Critics of Trump's policy point to the Dow Jones industrial average falling 500 points after the announcement.
Hatch's use of the word “tax” to criticize Trump's tariff policy is not an accident. Republicans in Congress are also worried that this new policy could distract from and even undermine the tax plan they passed in December, the centerpiece of their legislative agenda they hope to run on this November to keep control of both chambers of Congress.
But the politics of trade are also shifting underneath Washington. During the campaign, a fascinating shift happened in Republican circles, one that gives Trump leverage in this intraparty debate on tariffs. The GOP base became openly wary of trade. And Republicans probably have Trump to thank for that shift.
As I wrote then:
From almost the beginning of his campaign, Trump has sounded more like Sen. Bernie Sanders (Vt.) than House Speaker Paul D. Ryan (R-Wis.) when he talks about trade. He's even threatened to back out of the North American Free Trade Agreement signed by President Bill Clinton.“It's almost as though they want to protect the world, and they don't care about our workers,” Trump said of free-trade supporters while speaking at a closed manufacturing plant in New Hampshire recently.
Toward the end of the campaign, Republican voters' opinions of free trade were at their lowest since 2009, according to polling.
It's not a coincidence that normally pro-trade Republicans such as Sens. Patrick J. Toomey (Pa.), who wrote a book praising past trade deals, and Rob Portman (Ohio), who was literally the U.S.'s top trade representative before becoming a senator, had to shift their trade policy in their reelection campaigns. Both of them declined to support the TPP.
Trump would argue that he's tapping into a populist sentiment that favors the steel and aluminum manufacturers in West Virginia and Ohio over countries such as China, which the United States has long criticized for producing too much steel.
A June 2016 survey by the Public Religion Research Institute and the Brookings Institution found that a majority of Americans said free-trade agreements were more harmful than helpful — with Trump supporters the group most inclined to say they are harmful.
He isn't the first Republican president to try to walk this line between his party's free-trade principles and populism. When President George W. Bush imposed similar tariffs in 2002, he did it against the advice of many of his advisers, and at the benefit, he argued, of struggling steel plants in states such as West Virginia, Ohio and Pennsylvania. (Bush lifted the tariffs a little more than a year later when Europe threatened a trade war.)
Trade is one of those issues that doesn't fall neatly along political fault lines. But it's rare that an issue divides a party in such stark ways. And for all of Republicans' disagreements with their president, this is one on which they may never be able to see eye to eye.