House Financial Services Chairman Jeb Hensarling sharply rebuked the Trump administration Thursday over its treatment of allies and the handling of trade, urging it to unite with “traditional allies to confront China.”
Hensarling, R-Texas, made his comments at the opening of testimony by Treasury Secretary Steven Mnuchin and in the wake of President Donald Trump’s trip to Europe, where the president said both that the North Atlantic Treaty Organization was strong and yet criticized its members, most of which are close trading partners.
Mnuchin was testifying on the state of the international financial system.
When pressed by lawmakers, Mnuchin declined to spell out the goals of the administration’s trade policy and wouldn’t give Rep. Ann Wagner, R-Mo., an estimated time when it would achieve its goals. “The economic team is very focussed on this,” he said. He added that in conversations with trading partners, the administration is “advocating” no tariffs, barriers or subsidies.
Endorsing a reduction in trade barriers, Hensarling said ending trade deficits and imposing reciprocal trade policies aren’t the same as reducing barriers. He noted that no trade would eliminate deficits. Just because other nationals punish their consumers with tariffs doesn’t mean that the U.S. should follow suit, he said. “A tariff is a tax.”
Trump has used Sec. 232 authority under the Trade Expansion Act of 1962 to impose tariffs on about $46 billion worth of steel and aluminum imports, including from allies such as Canada, Mexico and the European Union. The moves have riled trading partners and raised prices for U.S. consumers and businesses reliant on lower-cost imports from abroad.
Hensarling’s comment was the latest among Republicans worried that the president’s policies are going to harm constituents and the U.S. economy. He told Mnuchin that the only trade agreement that the administration has reached, with South Korea, involved a quota on steel exports to the U.S. Other panel members from both parties joined the criticism of the administration’s trade policy.
“Tariffs can also damage entire industries, including strategic ones like our domestic energy industry,” Hensarling said, adding that the oil and gas industry imports specialty steel. “The tariffs may just harm our ability to remain energy independent.”
In a pointed comment about Trump’s many disputes with U.S. allies, Hensarling said, “The Honda Accord that I drove to work in doesn’t threaten national security.”
Mnuchin said the administration has no specific trade agreement model for deals with other countries and trading partners.
His testimony comes a day after Sen. Bob Corker, R-Tenn., finally got his colleagues to vote in support of Congress playing a role in national security-related trade decisions like those made recently by Trump. The symbolic, nonbinding, vote was was 88-11. House lawmakers introduced similar legislation late Wednesday, indicating that more and more members in both chambers are seeking ways to curb the administration’s trade policies.
However, Speaker Paul D. Ryan, R-Wis., once again said that engaging with the administration on trade policy is going to be more effective than passing tariff-blocking legislation that won’t make it into law. The president would have to sign any tariff related legislation for it to become law.
Watch: Trump Signs Steel and Aluminum Tariffs
Andy Barr, the chairman of the Monetary Policy and Trade Subcommittee, warned of the threat to Kentucky’s bourbon industry and a Toyota plan in his district. Toyota Camrys and bourbon don’t affect national security, said Barr, R-Ky.
Mnuchin said the administration is “very focused with new retaliatory measures and resolving them.” He also said the administration is willing to discuss with China an effort to make structural changes to address trade.
The United States has long complained about Chinese theft of U.S. intellectual property and policies designed to give its state-owned enterprises a competitive edge over U.S. companies.
The administration this week also threatened to impose another $200 billion in tariffs on an array of Chinese imports including leather goods, textiles and fish products.
Meanwhile, the House Ways and Means Trade Subcommittee announced a July 18 hearing on the impact on agriculture and rural communities because of the U.S. steel and aluminum tariffs as well as tariffs imposed on China. Retaliatory duties triggered by U.S. actions also will be examined.