House Ways and Means Chair Jason Smith and other Republicans on the panel were giving a robust defense of President Donald Trump’s aggressive tariff policy Wednesday even as the president was making a sharp course correction by pausing and lowering tariffs on 75 unspecified countries.
“The Trump agenda prioritizes the long-term prosperity of working families and communities ahead of short term stock market swings,” Smith, R-Mo., said to open the hearing on the trade policy agenda with U.S. Trade Representative Jamieson Greer. “The American people are counting on us to think beyond today’s headlines and stay focused on growing the economy and creating good paying jobs.”
Rep. Mike Kelly, R-Pa., echoed that support.
“We sit here today trying to make this a political event, instead of a country-saving event,” Kelly said. “Who’s finally going to talk about the real problems in America and quit talking about the stock market, stop talking about all these others, because I’ve watched it go up, I’ve watched it go down, I’ve watched it go sideways.”
“I applaud the president of the United States for having the backbone to stand up and fulfill a pledge that others have made before him,” Kelly said. “He stands up into a stiff wind and says, it’s going to hurt for a while until we get back to where we need to be.”
The president, meanwhile, was changing his mind. He posted on Truth Social that he would pause and lower reciprocal tariffs on more than 75 countries, that they hadn’t retaliated against the U.S. tariffs announced last week and therefore would get a 90-day pause. The pause doesn’t extend to the baseline tariff, which will remain at 10 percent. The president didn’t name the countries, but they appear to include European Union members.
And he said he was raising the levy on goods imports from China to 125 percent.
Trump only a week ago set a flat 10 percent tariff on all goods imports and reciprocal tariffs against many countries based on the size of the U.S. trade deficit with those countries. The news led to steep declines in the equity markets.
His Truth Social posting about the change in course Wednesday sent equities surging, with the Nasdaq up more than 12 percent at the close.
As Trump was revising his plan, Greer was himself urging the committee members to be patient. The tariff agenda is aimed at achieving reciprocity, and the U.S. trade deficit will not be resolved overnight, he said.
Most Republicans said they supported the agenda that still includes the 10 percent tariff baseline with higher tariffs on some countries, and on auto imports, steel and aluminum.
Lawmakers’ concerns
Rep. David Schweikert, R-Ariz., asked Greer if the U.S. is ready for the return of manufacturing that it seeks, specifically in the pharmaceutical manufacturing that was expected to be another Trump target.
“Do you with your staff say, ‘oh, but guys, we don’t have the infrastructure mechanics to deal with the byproducts, the EPA permitting process to actually get the permits, maybe we should approach Congress,’” Schweikert said. “I support the ultimate goal, I’m just wondering if the sequencing has been done with the details that are necessary to make it successful.”
Greer responded “absolutely.”
“I think we certainly would welcome Congress supporting the reshoring of manufacturing,” he said. “I’m happy to talk to the White House Office of Legislative Affairs about that. I think there’s a lot Congress can do if they would like to.”
Rep. Darin LaHood, R-Ill., said he had concerns about the impact on agriculture. LaHood’s home state is the top producer of soybeans, accounting for 16 percent of the country’s production, the Agriculture Department’s Foreign Agricultural Service reports.
“But as I talk to my farmers, there’s a lot of anxiety, a lot of stress, a lot of uncertainty. Because when we get into a trade war, usually the first pawn in the trade war is agriculture,” LaHood said. “And as we look at the timeline and chronology, moving forward, Ambassador Greer, what would you tell my farmers in terms of that uncertainty and anxiety that they’re feeling right now?”
During Trump’s first term, tariff retaliation fell hard on farmers. The agriculture industry lost more than $27 billion in exports from mid-2018 to the end of 2019, the USDA found. Most of the retaliation came from China, it says.
Greer said almost all countries have said they would not retaliate including Indonesia and India, and there are other countries that have said that they will reduce their tariffs.
Trump’s posting about the pause continued the aggressive rhetoric about China, along with the boost to a tariff of 125 percent on goods imports. “China will realize the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump said.
Greer said that China is different from the countries that have declined to retaliate.
“They’ve always given us a hard time. They’ve always limited our access over there, and they’re doubling down on that path. That’s an issue of Chinese agency,” he said.
China had raised its retaliatory tariffs on imports from the U.S. to 84 percent only a few hours before Trump made his latest move. The Chinese tariffs take effect on Friday.
European Union members voted on Wednesday in favor of the European Commission’s proposals for trade countermeasures. The EU also noted it would prefer to negotiate. The administration said it would pause the reciprocal tariffs on the EU because the bloc hadn’t yet put its retaliatory tariffs into effect. The U.S. would levy the 10 percent baseline tariffs on goods from the EU.
Rep. Blake D. Moore, R-Utah, said he was concerned about retaliation and Trump’s approach.
“My question here is, what are the consequences for American power and national security if they were able to retaliate and restrict access to American services in their market? Because we’ve chosen to restrict goods in their market,” Moore said.
“If this is prolonged, does their position on no retaliatory commitment, does that wane?” Moore said. He also wondered whether restricting U.S. export abilities will hamper innovation.
“I think that we benefit from having huge innovation here in the United States, we have an economy that cultivates innovation. We prioritize it. We have an intellectual property system that protects it,” Greer said.
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