Top trade advisers to former President Donald Trump slammed an effort by Republican and Democratic lawmakers to immediately expand tariff exclusions on billions of dollars of Chinese goods, exposing a fault line inside Congress over trade policies involving China.
In a letter to U.S. Trade Representative Katherine Tai, House Minority Leader Kevin McCarthy and a bipartisan group of lawmakers, including 60 Republicans, urged President Joe Biden’s top trade official to expand tariff exclusions on Chinese goods, arguing that the administration’s current proposal to relaunch exclusions is too narrow. The tariffs are undermining the competitiveness of American manufacturing compared to foreign competitors and hurting U.S. consumers, the letter says.
The Trump-era tariffs were aimed at pressuring the country to halt what officials described as a pattern of unfair trade practices and theft of American intellectual property. But companies said the barriers came at a cost to American firms, with many growing frustrated that Biden has not done more to ease them.
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Reopening the exclusion process would allow companies to apply for exemptions from tariff duties for goods subject to Section 301 of the U.S. trade law, a priority for business groups that have lobbied the White House and Congress on the issue for months.
But former top advisers to Trump argue that dismantling the tariffs would be an economic boon to China and are urging the former president to review his political endorsements of lawmakers who signed the letter.
“The trade deficit with Communist China is soaring off the charts, stealing more American jobs,” said Peter Navarro, White House director of trade and manufacturing policy during the Trump administration. “That’s a case for raising tariffs, not lowering them.”
Navarro, Trump’s trade adviser in the White House, warned that Republicans proposing to weaken the tariffs, a pillar of the former president’s U.S.-China trade war, could face bloodshed in the midterm elections.
“Trump’s deplorable base is coming for any Republican that cozies up to the Chinese Communist Party,” he said.
Just two years ago, McCarthy said the tariffs had proven effective in bringing China to the negotiating table for a “Phase 1” trade deal, despite his initial reservations.
The issue is likely to remain at the forefront of electoral politics regardless of whether Trump makes another bid for the presidency.
In late 2020, shortly before Biden took office, then-U.S. Trade Representative Robert Lighthizer advised the incoming president to stick to the deal and use tariffs as leverage. Lighthizer now chairs the Center for American Trade at the pro-Trump America First Policy Institute.
A source told the Washington Examiner that Lighthizer was so fired up by the push to weaken the tariffs that he considered going on Fox Business News to denounce it. Lighthizer declined a request for comment.
Tai is currently reviewing a slate of more than 500 possible exclusions, including some expired, and has called for defending U.S. economic interests “to the hilt” from damage caused by years of unfair competition.
A former top trade official during the Trump administration denounced the push for exclusions as a gift to China amid Washington’s efforts to extract concessions from Beijing.
“This is clearly a reward for the Chinese. These companies had four years to bring [supply chains] back, and they elected to keep it in China,” this person said. “There’s no rationale at all for why these companies should get any more exclusions — just none.”
“It’s the China lobby affecting members of Congress,” he added.
In addition to McCarthy, close to a half-dozen Trump-endorsed candidates have signed the letter, including Reps. Gus Bilirakis of Florida, Ronny Jackson of Texas, Virginia Foxx of North Carolina, and Jody Hice of Georgia, who is running to unseat Georgia Secretary of State Brad Raffensperger.
Other Republican signatories, such as South Carolina Rep. William Timmons, are targets for GOP challengers under an America First banner — or like South Dakota Rep. Dusty Johnson are subject to murmurs over whether he could be a fit to replace a sitting GOP senator viewed as insufficiently loyal to Trump. Rep. Billy Long of Missouri has hired a close Trump adviser to help his bid for the U.S. Senate.
Navarro urged the former president to take another look at whom he is backing, with the former president’s endorsements subject to intense jockeying as the election year gets underway.
“President Trump should reevaluate that situation,” Navarro said, arguing that Republican lawmakers who don’t share the former president’s priorities could place a stranglehold on his ambitions if he were to seek and win office again.
“We had just repeatedly Republicans undermining us during the four years President Trump was trying to crack down on the Chinese,” he said.
Navarro leveled his fiercest criticism at McCarthy, calling for his ouster and blaming the California Republican for stifling a Buy American provision pursued by the White House during the last administration.
“Kevin McCarthy is poison. And he needs to go. He’s bad to the bone,” Navarro said. During the Trump administration, he said the White House had “buried” a provision in [the National Defense Authorization Act] to prohibit China from bidding on Metro Rail and subway projects. McCarthy gutted it, he said.
“McCarthy is supposed to be a leader,” Navarro added, asking whether Ohio Rep. Jim Jordan had signed his name to the letter. Then he endorsed him.
“Is Jordan on any of those lists? Jordan should be the House speaker, not McCarthy.”
“The leader has joined with other members, led by Walorski and LaHood, to call on the administration to allow for exclusions from the 301 tariffs,” said Mark Bednar, director of strategic communications and spokesman for McCarthy. “These exclusions were put in place by the Trump administration, who recognized that we didn’t want to penalize American manufacturers and employees when dealing with the real problems posed by China’s unfair trade practices. We supported the Trump administration when they instituted these exclusions.”
Navarro cut Jackson, Trump’s physician in the White House before running for Congress, calling him “a good man” who is “getting bad advice from the swamp.”
“Ronny should know better. He needs an economic adviser. But he’s a doctor, not an economist,” Navarro said.
Six Republicans who recently interviewed with the Ways and Means Steering Committee for an open spot also signed the letter, including Reps. Randy Feenstra of Iowa and David Kustoff of Tennessee, both top picks, a source told the Washington Examiner, as well as Reps. Michelle Steel of California, Michelle Fischbach of Minnesota, Brian Fitzpatrick of Pennsylvania, and Bryan Steil of Wisconsin. If Republicans retake the House in November as some analysts expect, 12 members will likely join the committee.
One Trump-endorsed incumbent, Rep. Beth Van Duyne of Texas, also interviewed for the spot last week, along with Reps. Peter Meijer of Michigan, Greg Steube of Wisconsin, and Jeff Van Drew of New Jersey.
China and the matter of economic competitiveness are likely to be a top issue going into the midterm elections. Surveys show that Democrats are already losing out to Republicans on messaging, Brian Stryker, a partner at ALG Research, told Bloomberg last week. Meanwhile, Republican challengers running under an America First mantle are cropping up in deep-red districts.
“If they go back to that Old World China’s free trade-ally type mentality, the voters will just not show up,” a source advising lawmakers on the issue said.
Trump, who is weighing a slew of further endorsements, is eager not to simply add districts into the GOP column.
“It’s not good enough to just flip it RINO red,” said one Republican political consultant who has discussed the issue with Trump. “Then you have the same problem going into 2024, trying to govern with a hostile party.”
The issue has animated some conservatives aligned with the America First movement who are frustrated by McCarthy’s plan to hold on to incumbent Republican seats.
The Biden White House has gingerly approached the matter of trade with China, at times floating the prospect of new investigations into Chinese subsidies, which could lead to new tariffs, while alternately suggesting that U.S. officials are looking into exclusions from tariffs for some products.
The administration earlier this year defended Trump’s use of Section 301 tariffs at the International Trade Court, which allowed them to retain their use.
Biden touched on the prospect of lifting some tariffs on Chinese imports during a news conference last week but said he expects Beijing to be “meeting … more of their commitments” under the Phase 1 trade deal the two countries reached in 2020.
“I’d like to be able to be in a position where I can say they’re meeting the commitments, or more of their commitments, and be able to lift some of it,” Biden said. “But we’re not there yet.”
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China has fallen approximately 40% short of the $200 billion in additional U.S. goods it pledged to purchase over the past two years, according to trade data compiled by the Peterson Institute of International Economics through late last year.
He acknowledged the pressure from business groups to lift the tariffs despite this, noting, “That’s why my trade rep is working on that right now. The answer is uncertain. It’s uncertain.”
CORRECTION: A previous version of this article stated Rep. Diana Harshbarger of Tennessee interviewed for the House Ways and Means Committee. Harshbarger’s office has denied the interview took place.
