Conservatives are worried a trade war with China could wipe out the positive economic benefits of the tax-cut law and cost Republicans their majorities in Congress.
Conservatives are worried a trade war with China could wipe out the positive economic benefits of the tax-cut law and cost Republicans their majorities in Congress.
“What Republicans and President Trump did in December was create this enormous, pro-growth tailwind going into this November’s elections, and I think that they’ve needlessly created this headwind that could erase all of those gains,” said Andy Roth, vice president of government affairs at the conservative Club for Growth.
“This is a huge unforced error,” he added.
The tax law has been at the center of the GOP’s midterm messaging, with Trump and Republican lawmakers touting its boost to paychecks and the economy.
In an appearance Thursday in West Virginia, Trump highlighted Sen. Joe Manchin ’s (D-W. Va.) vote against the tax bill in a state where Republicans think they could win a Senate seat this fall.
“The Democrats have a problem. I mean if you look at your senator, he voted against [the tax bill],” Trump said.
But conservatives warn that message could be undercut if Trump’s actions on trade counteract the tax cuts’ benefits.
Stocks have already fallen, with traders pointing their fingers to the tariffs as an explanation.
When the final tax-reform package passed the House in December, the S&P 500 index was at 2,697. On Thursday, it closed at virtually the same level of 2,662. While that figure is up some 15 percent since Trump’s inauguration last year, it’s also a 9 percent drop from the market’s January peak.
Trump’s new chief economic adviser Larry Kudlow told reporters at the White House on Tuesday that the market was simply undergoing a “mild” and “overdue” correction, and floated the possibility that the U. S. and China would reach a trade deal before the most recent round of tariffs went into effect, according to CNBC.
The potential of a trade war has made headlines from coast to coast.
“Talk of Tariffs Leaves Local Ag, Steel business ‚in limbo,’ ” read the splash headline in the Fargo, N. D., paper The Forum on Thursday .
“Tariffs grab Ohio’s attention,” proclaimed the lead story in Ohio’s Columbus Dispatch.
In Peoria, Ill., the Journal Star led with a story about Chinese trade practices harming American recycling firms, and followed with a story below the fold on how tariffs could hurt the local farmers and economy.
The latest trade tensions erupted this week when the Trump administration unveiled a list of potential tariffs on $50 billion worth of Chinese imports, including metals, machine parts and electronic components.
