President Trump’s announcement of tariffs on imported steel and aluminum seemingly came out of nowhere, and Saturday’s comments alluding to increased taxation on European-made cars doubled down on the unpopular decision. Now, incumbent Republicans are growing more worried that the president’s recent proclamations on trade could derail the party’s attempt to maintain its congressional majorities ahead of the 2018 midterm elections.
The main fear growing within the GOP is that any benefit the party could tout as a result of the widely-derided tax cut could be “undercut” by the proposed 25 percent tariff on steel imports and 10 percent tariff on aluminum imports. “American manufacturers, businesses and consumers would be forced to bear the brunt,” said Sen. Orrin Hatch, chairman of the Senate Finance Committee, adding, “Such action could very well undercut the benefits of the pro-growth tax reform we fought to get on the books.”
Past the expected rise in price for steel and aluminum products, the potential loss of jobs poses the largest impact to an American economy that has been trending down over the past few weeks, even before Trump’s desire for a trade war emerged. In a CNBC Op-Ed, Trump allies Larry Kudlow, Arthur Laffer and Stephen Moore relayed the point that “even if tariffs save every one of the 140,000 or so steel jobs in America, it puts at risk five million manufacturing and related jobs in industries that use steel.”
If the expected financial and employment ramifications of Trump’s proposed tariffs come to fruition, the GOP would have substantially less political ammunition to utilize against surging Democratic support on the campaign trail. Things could get even worse if the European Union makes good on its threats to respond with its own trade regulations on American exports. According to Politico, the EU is already targeting goods produced in key swing states, such as Florida oranges and Wisconsin-based Harley-Davidson.
The president’s rhetoric grew more problematic on Saturday when, in a tweet (of course), he threatened slapping a tax on European cars sold in the U.S.
What’s scary to legislators and citizens alike is that the president doesn’t have to seek congressional approval for such actions. “When it comes to trade, that’s an executive power. There’s very little we can do,” said a senior Republican aide. All the GOP can do is try to convince Trump that trade wars are not easy to win. That, or, like some conservatives supporters, try to convince him to shrink the focus of his tariffs to China, though singling out another global financial power might not be the best course of action either.
It also looks as if Trump’s top economic advisor, Gary Cohn, might follow countless other White House officials out the door in the near future. If that happens, the key voice within the White House that opposes Trump’s tariffs would become nothing more than another gust in the whirlwind of staff upheaval in the recent history of the executive branch.
It seems that the trade war the president wants is inevitable at the moment, and his actions are furthering a divide within the Republican party along economic lines that do nothing but threaten the congressional majorities the Trump administration has not been able to even fully utilize in its first 14 months. If the GOP loses the ability to spin a tax plan that lowers the corporate tax from 35 percent to 21 percent as something that will bolster the middle class, they could potentially lose even more ground come November. And they’re already facing an uphill climb vis-a-vis American business—it will be hard enough for them to combat studies that show that companies will only spend 13 percent of their savings under the new tax plan on employees.