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Republican lawmakers from across the farm belt stood with President Donald Trump as the trade war with China escalated on Monday with China set to implement higher tariffs on $60 billion worth of U.S. goods.
Farmers will see the most pain from the tariff increases that target a wide range of agricultural products.
The tax on these goods, which will not go into effect until June 1, is in retaliation for the Trump administration’s decision on Friday to increase duties on $200 billion worth of Chinese imports to the U.S. from 10% to 25%.
Senator Chuck Grassley, the Iowa Republican, backed the president after China announced retaliatory measures on products such as frozen spinach, natural honey, and potassium sulfate, which is often used in fertilizers. As of 2017, the U.S. Department of Agriculture listed Iowa as the second largest agricultural producer.
“President Trump shouldn’t give up on securing an enforceable agreement that holds China accountable for its abusive trade practices,” Grassley said in a statement. He acknowledged that farmers in his state are suffering from the ongoing trade war and called for it to end as soon as possible, but with a deal in place.
“Americans understand the need to hold China accountable, but they also need to know that the Administration understands the economic pain they would feel in a prolonged trade war,” he added.
Newly elected North Dakota Sen. Kevin Cramer called on Trump to continue to use his arsenal of trade barriers in order to beat China, which he believes will lead to a stronger position for the U.S. in negotiations.
“The best way to end a trade war is to win it. To win it, we must stay unified in the fight against our adversary,” Cramer told CNBC in a statement. “China’s bad faith negotiation style is as predictable as sunrise in the morning, and doing things the same old way will not work any better today than they have before. I stand with President Trump as he uses the strongest weapons in his arsenal,” he added.
But Heidi Heitkamp, the former Democratic senator who held Cramer’s seat before the 2018 congressional midterms, had reservations about the escalating battle and how it would affect her former constituents and the country at large.
She told CNBC that she believes tariffs are the wrong response to China’s practices and the ongoing trade dispute will have far-reaching consequences.
“The strategy that we’re deploying is going to have serious and permanent long term challenges for this country,” she said earlier Monday.
Sen. Rob Portman, R-OH, however, gave the president his blessing, saying the only way tariffs should be removed is if a deal is struck with China.
“We need a strong, enforceable agreement and once an agreement is reached the tariffs on both sides must come off,” his spokesman Kevin Smith said.
Senator Mike Rounds, R-SD, in an interview on Fox Business said farmers in his state are taking a hit from the trade deliberations but explained his constituents believe the president will find a way to make a deal with China.
“These folks can’t take a lot more of that, but when you talk to them, they’re saying, ‘we get it,’ we’ve got a president who’s really trying hard, we just hope he gets the job done,” he told the network on Monday.
North Dakota, South Dakota and Ohio are considered by the USDA as three of the top 20 states producing agricultural goods.
Republican Senators’ decisions to align themselves with Trump highlights the stranglehold the president has on a party that for decades was pro free trade and free market principles. That all changed once Trump took power.
Indeed, many of these Republican lawmakers are shrugging off the outcry from free market supporters, such as the influential Koch network which initiated a large scale ad campaign last year against Trump’s tariffs. The organization is financed in part by the billionaire Charles Koch. The political network did not back Cramer in his Senate bid after he came out as a staunch supporter of Trump’s trade war.
A spokesman for the Koch backed Americans for Prosperity, Bill Riggs, said they were disappointed with the administration’s trade strategy.
“We’re disappointed the administration is doubling down on a strategy that guarantees both sides lose. American families and businesses shouldn’t have to suffer in order to get a good deal,” Riggs said. “There are better ways to pressure China without punishing Americans with higher taxes and risking the long-term damage that a prolonged trade war would have on American businesses.”
Meanwhile, the president told reporters on Monday that farmers will get $15 billion in subsidies to blunt the effects of China’s retaliatory efforts. Tariffs, which are paid by U.S. businesses and consumers, would be used to bail out farmers. The administration has already given billions of dollars in aid to farmers in response to the Chinese tariffs.
“Out of the billions of dollars that we’re taking in, a small portion of that will be going to our farmers, because China will be retaliating, probably to a certain extent, against our farmers,” Trump said. “We’re gonna take the highest year, the biggest purchase that China has ever made with our farmers, which is about $15 billion dollars, and do something reciprocal to our farmers, so our farmers can do well.”