Preserve NAFTA?

Republicans seek to tame Trump on trade

GOP senators are urging the president to preserve NAFTA — and hope to get some assurances at the State of the Union.

By BURGESS EVERETT

Forget the stalemate over immigration and spending. Right now, Republicans are most worried about President Donald Trump’s trade policy.

Fresh off new tariffs aimed at imported washing machines and solar panels, GOP lawmakers fear a round of tariffs targeting steel and aluminum — or worst of all: a sustained attack on NAFTA and dissolution of the trade agreement entirely. Trump’s populist trade policies dominated the Senate GOP’s strategy sessions last week, privately eliciting handwringing from the party’s large bloc of free traders, according to GOP sources familiar with the matter.

As the White House teases a conciliatory approach for Trump’s first State of the Union, Republicans hope he also will offer them an olive branch on one of the most yawning divides between the president and his party.

“That would be welcome,” said Senate Majority Whip John Cornyn of Texas, whose state is a key beneficiary of the North American Free Trade Agreement. “I don’t want us to shoot ourselves in the foot by terminating NAFTA or creating anxiety where it’s not necessary.”

While most Republicans have fallen in line behind a president they largely did not support in the 2016 presidential primary, many in the GOP are still comfortable taking on Trump when their states’ interests are jeopardized. Senate Republicans are now circulating a letter addressed to the president asking him to preserve NAFTA, according to GOP officials on Capitol Hill.

It’s a pointed example of the party’s lingering divisions under Trump — on an issue where there may be significant action amid an otherwise unproductive legislative year. And it’s a reminder that on trade, Trump can largely do what he wants through the executive branch with little recourse from Congress.

“I’ve encouraged him to think of it in terms of modernizing NAFTA, not ending NAFTA,” Cornyn said. “A lot of members in our conference and on both sides of the aisle are trying to encourage the president to think in those terms.”

The GOP has long been a party of free traders. During the past two years of President Barack Obama’s presidency, Senate Republicans labored to pass a bill giving him the ability to quickly negotiate new trade deals. Now they have a president of their own party who prefers to scrap trade deals and slap tariffs on other nations.

Senate Finance Chairman Orrin Hatch (R-Utah), who led the fight to give Obama so-called Trade Promotion Authority, said he wants to hear Trump “extrapolate” concrete policies, because “right now they’re just suggestions.”

“I’m not uncomfortable. But I’m not comfortable either,” Hatch said of Trump’s trade stance. “I’m a free-trade guy. And I believe that this ought to be a free-trade country, especially when it comes to NAFTA and our hemisphere.”

Republican sources said GOP senators’ disagreements with Trump on trade surface far more often in party lunches than what the president said on Twitter or the chaotic story of the day from within the White House. Senators will often wait to complain about Trump’s policies until Tuesdays, when Vice President Mike Pence often visits the GOP lunch, hoping that bending Pence’s ear will help moderate Trump.

And in some cases, Trump has listened. His decision to impose tariffs on solar panels wasn’t as severe as some senators had feared. And Trump opened the door last week to re-engaging on the Trans-Pacific Partnership, a massive deal negotiated by Obama with Pacific Rim countries that Trump rejected shortly after taking office. The Trump administration has also sought to soothe some senators over NAFTA in recent weeks, according to GOP senators.

But some are still wary that Trump’s policies in general, like new potential tariffs on steel and aluminum, could lead to major pain in rural America and states that rely on agriculture.

“Trade is necessary for agriculture. And I do worry that putting on tariffs on these goods, that agriculture will be hit in retribution by other countries,” said Sen. Joni Ernst (R-Iowa). “And it is easy to hit ag.”

In Ohio, however, Trump’s trade actions cut a different way: The state’s manufacturers have been struggling to compete with cheap washing machines produced in Asian countries.

“He’s on the right track in some regards, like trying to ensure we’re having a level playing field. That’s why I supported the washing machine case,” said Sen. Rob Portman (R-Ohio), a former U.S. trade representative. “The concern I have is not so much those level-the-playing-field actions, as the trade agreements.”

The biggest fear is Trump will follow through on his long-held threat to scuttle NAFTA, which could dramatically reshape the global economy and disrupt a number of conservative states that sell goods across North America borders. Many lawmakers believe they would have little ability to stop Trump if he decided to dissolve the trade pact, so they are pressing for Trump to work on improving NAFTA rather than kill it.

“Any agreement that’s as old as NAFTA could be modernized or updated. But it’s fundamentally sound policy, and a majority of our members believe we need to make it clear we’re committed to it,” said Sen. Thom Tillis (R-N.C.).

Some Republicans said privately they are confident Trump won’t actually pull out of the agreement and is using his threats as a negotiating tactic. Others said they trust his instincts when it comes to forging economic deals.

“He’s a negotiator and he approaches things a little bit different than most people,” Hatch said. “Often he’s right.”

For Trump, the first step would be to formally notify Canada and Mexico of his intent to withdraw. Such an action would start a six-month clock, at the end of which he could terminate the agreement if he wanted to — though he wouldn’t have to.

Some lawmakers said they believe Congress could stop him from withdrawing after the six-month clock expired, but worry that Mexico and Canada would use that time to begin forging new trade agreements with other countries. Plus it would provoke an ugly intraparty feud that would distract from all other issues.

Most Republicans would rather just hear Trump say during the State of the Union that he’s keeping NAFTA but working to improve it, rather than entertain doomsday scenarios.

Sen. Roy Blunt (R-Mo.) said he is hoping Trump reprises on Tuesday a recent speech he made in Tennessee, where he said he was looking for “fair and reciprocal” trade deals and wants to improve NAFTA. Blunt said those comments were “pretty good.”

But, he added: "A lot of the other comments I’m not so happy with.”