Paul Ryan Tax Cut Showcase Upstaged by Trump Tariff Announcement
(Bloomberg) -- House Speaker Paul Ryan was in Atlanta to tout the economic benefits of tax cuts, the centerpiece of the Republican campaign to hold on to Congress. President Donald Trump had other ideas.
The competing economic instincts that are dividing Trump from the rest of his Republican Party were on full display Thursday. Ryan told Home Depot Inc. employees how they and their company will be helped by the tax cuts passed last year. At almost the same time, the president was announcing steel and aluminum tariffs that Ryan and others in the GOP say will slow growth and raise prices for consumers.
"I disagree with this action and fear its unintended consequences,” Ryan said in a statement. “We will continue to urge the administration to narrow this policy so that it is focused only on those countries and practices that violate trade law.”
Ryan said many more jobs depend on companies that are steel consumers, compared to steel manufacturers in the U.S. When asked by a Home Depot employee in Atlanta what Congress could do about it, Ryan said: “We’re working on it.” He didn’t elaborate.
Ryan has been reluctant to criticize Trump, even when the two disagree. But the issue of tariffs has sparked the Wisconsin Republican’s strongest criticism of the president’s policies. Trade is now the issue that has driven the most distance between Ryan and the president he reluctantly endorsed during the campaign.
Republicans fear Trump’s action risks distracting voters and disrupting the U.S. economy just months before the midterm election that will test his protectionist policies, populist rhetoric and chaotic approach to the presidency.
The president signed a proclamation authorizing the tariffs at a meeting Thursday afternoon with workers from the steel and aluminum industries. The U.S. will levy a 25 percent duty on steel and 10 percent on aluminum, the same level Trump promised when he revealed the plan March 1. The tariffs will take effect in 15 days.
Trump said he was “defending America’s national security” by imposing the tariffs. The president said U.S. political leaders preceding him had allowed the decline of manufacturing in the nation, and cited a protectionist predecessor, President William McKinley, in defense of the tariffs. “Our factories were left to rot and to rust all over the place,” Trump said.
The tariff proclamation excludes Canada and Mexico and leaves the door open to sparing other countries on the basis of national security.
Ryan is trying to persuade voters to elect Republicans and allow the party to keep control of the House by highlighting the GOP’s successful drive to cut taxes for corporations and many individuals. He has urged Republican lawmakers to stay focused on reminding voters about the tax cuts rather than White House policy surprises and scandals.
All 435 seats in the House will be on ballots. Democrats need to gain a net total of 24 seats to win the majority, which would allow them to block Trump’s legislative agenda. The party’s odds of gaining a majority in the Senate, where the GOP holds a one-vote majority, are steeper because Democrats hold most of the seats up for election this year.
Lawmakers from both parties said Trump’s action on trade would hurt the economy and increase prices for consumers and businesses.
“Unless the president reverses course, it will be American consumers, workers and families who will lose,” Democratic Senator Dianne Feinstein of California said.
Senator Jeff Flake, an Arizona Republican, called the tariffs “a marriage of two lethal poisons to economic growth -- protectionism and uncertainty.” He said he plans legislation that would nullify them.
Republican Ben Sasse of Nebraska said the U.S. is on the verge of a “stupid trade war.”
“This isn’t just bad for farmers and ranchers in Nebraska who need to buy a new tractor, it’s also bad for the moms and dads who will lose their manufacturing jobs because fewer people can buy a more expensive product,” he said.
House Ways and Means Committee Chairman Kevin Brady, a Texas Republican, praised Trump for exempting Mexico and Canada from tariffs -- for now -- and said the White House should “go further to narrow these tariffs so they hit the intended target –- and not U.S. workers, businesses, and families.”
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