Trump's steel and aluminum tariffs expose GOP rift; agriculture 'particularly vulnerable' to trade conflicts

Washington Post graphic; click on the image to enlarge it.

President Trump's planned tariffs on steel and aluminum have exposed a deep rift in the Republican Party that will be difficult to bridge. It wasn't hard to see it coming: Congressional Republicans largely supported the Trans-Pacific Partnership, which Trump jettisoned immediately upon taking office

But Trump's protectionist philosophy brought most Republican voters to his side of the debate. "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," Amber Phillips writes for The Washington Post.

Many Republican leaders fear the tariffs will trigger a trade war not just with China, but allies like Canada, Mexico and Brazil. China is already threatening a trade war over U.S. sorghum and soybean exports in the wake of Trump's solar-panel tariffs. Republicans also worry that, by making imported aluminum and steel more expensive, products that need those imports will become more expensive for Americans. "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," Phillips writes.

Sen. Ben Sasse (R-Neb.) said "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." Senate Finance Committee Chair Orrin Hatch (R-Utah) was also highly critical.

China sends relatively small amounts of steel and aluminum to the U.S., but "the Trump administration is already planning another action aimed solely at Chinese policies and practices that it says puts billions of U.S. intellectual property at risk and forces American companies to hand over valuable technology," report Doug Palmer and Adam Behsudi of Politico. "That could potentially lead to the United States imposing retaliatory tariffs on an array of Chinese goods — setting the stage for a bilateral trade row that could hit an array of U.S. sectors. Agriculture would be particularly vulnerable since China is the top U.S. customer for soybeans, as well as overall U.S. agricultural exports."

UPDATE: Farm leaders "expressed shock" at Trump's plans, Jerry Hagstrom reports for DTN/The Progressive Farmer.