Republicans Press USTR on Trade Policy in Private Lunch

When asked if Greer seemed open to adjusting the approach in response to Republican senators' feedback, Indiana Sen. Todd Young, said, "I think they're pretty intent on staying the course." Young said he didn't get a chance to ask his question because there were too many members wanting to ask questions.

Sen. James Lankford, of Oklahoma, said that the back-and-forth over tariffs at the Republican lunch was "pretty extensive, actually." He declined to say what he said on the topic.

Sen. Chuck Grassley, of Iowa, said he and several other senators brought up agriculture issues. He said he approved of the president's announcement that he would block the import of cooking oil from China, as it would improve the market for domestic growers selling biodiesel.

Before attending the lunch, Greer pointed to China's announcement of a broad expansion of export controls on critical minerals as proof positive that President Donald Trump needs to have the ability to immediately hike tariffs through the International Emergency Economic Powers Act. Whether the IEEPA authorizes tariffs, and under what circumstances, will be argued soon at the Supreme Court.

"We see with this Chinese provocation why it is very important for the President to have emergency powers to implement tariffs, because he needs to be able to use this to push back against this Chinese overreach against the world," Greer said at a press conference the morning of Oct. 15 at the Treasury Department. "So if it was not clear to anyone on the court before last week that the President needs emergency powers to protect the American people and the American economy, then it should be abundantly clear now."

Sen. Rand Paul, R-Ky., the leading voice in the Republican Party against the president's tariff policy, dismissed this argument. Paul, who has co-sponsored bills to rescind the emergencies the president has declared in order to hike tariffs, said China was reacting to U.S. actions.

"If there is an emergency, the emergency is in the farm economy right now," he said in an interview at the Capitol. "That is caused by the tariff war, and is caused by the people that are promoting these tariffs. So, instead of saying, 'Oh, we caused one problem, so we'll subsidize the people we really hurt with our other policy,' there's no understanding that they made an error."

On whether China was being provocative or disproportionate, as Greer and other cabinet members have said, Paul said, "It's sometimes hard to determine who went first. It's like your kids are in a fight: She called me a name. No, he bit her, which one happened first?

"We've been putting sanctions on China for 10 years. We first started putting tariffs on them in a big way in the first Trump administration. They responded by buying less of our soybeans. They're devastating our soybean market. We're getting ready to have a catastrophe in soybean [farming]. Meanwhile, the administration is now giving $20 billion to Argentina, who sells their soybeans to China.

"Most of the problems we have with China are part of a tit-for-tat trade war, and in the midst of this, we have a bill by [Sen.] Lindsey Graham that has 80 people on it that wants to put a 500% tariff on China."

The bill actually has 85 sponsors.

Paul continued, "So it's not an example that we have an emergency, it's an example that the trade war that this administration is involved in is backfiring, and killing our farmers." He called it bizarre that the administration says they intend to fix the Chinese purchase boycott for farmers with subsidies "instead of acknowledging that the tariffs caused the problem.

"And people are pushing back some. One senator stood up and said, 'Well, could you take the tariff off potash, and the tariff off fertilizer?' Instead of just giving farmers billions of dollars, why don't you take hundreds of millions of tariffs off of things that farmers need? And no response.

"The thing is, if you wanted to do something to help the farmers, even if you kept the tariffs on China, get rid of the damn tariffs on potash and fertilizer."

There are trade remedies on many fertilizer exports; most potash should be entering duty free, because it either comes from Canada, where it should be considered originating under USMCA, or from Russia, where it is not subject to tariffs.

Both Paul and Grassley said they expected potash would be covered by USMCA.

Potash prices are up about 20% compared with last year, farm publications say. One fertilizer executive told a reporter the higher prices are due to "confusion" about the tariffs. However, another farm publication said it could be due to difficulties in barge shipping on the Mississippi, with low water levels.

Paul said the issue that manufacturers who want to expand or open up factories in the U.S. are also hit with tariffs was brought up again. He said a company that wants to produce in Kentucky is importing "$40 million worth of equipment, and it's all got tariffs on it."

He said the administration doesn't understand that manufacturing in America doesn't mean you don't pay tariffs. "Almost none of the robots are made here, you've got to buy these from other places," he said.

"Until we have an acknowledgment they've accepted economic fallacies, and they need to rethink their trade strategy, we're going to continue to have problem after problem, and I think the problems are going to get worse over time."

However, some Republicans interviewed at the Capitol cheered the administration's tariff hikes as a necessary strategy.

Wisconsin's Sen. Ron Johnson, who was a critic of tariffs during the first Trump term, said he gets "kind of a split message" from businesses in his state. "They understand what President Trump's trying to do; they're not real fond of the pain it's causing their particular business."

Sen. Eric Schmitt of Missouri said the president sees tariffs as effective. "I think that obviously, the big negotiation with China is on deck and happening, and I think we want more access to markets." Schmitt, one of the senators most allied with Trump's base, said the U.S. never adjusted to the end of the Cold War when thinking about free trade. "We were getting ripped off for a long time. So I'm glad that they've taken the issue head-on," he said.