WASHINGTON -- Senators, including many Republicans, on Wednesday openly expressed skepticism about President Donald Trump's trade policies, saying cascading tariff actions are so scattershot, tactical and unilateral that they are hurting American workers without forcing countries with unfair trade practices to change behavior.
At a hearing about the impact of tariffs on the auto industry, lawmakers and witnesses said lack of coherent policy was creating massive uncertainty, making it difficult for American businesses to make investment and hiring decisions.
Tariffs on imported steel and aluminum and hundreds of Chinese products already are raising the cost to produce vehicles in the U.S., and exporters are being hurt by retaliatory tariffs in overseas markets. The future of the North American Free Trade Agreement remains in limbo as the White House races to complete an updated deal that includes Canada after spending the last 18 months publicly bashing Mexico and Canada, saying they use the rules to steal U.S. jobs.
Meanwhile, auto interests are bracing for potential tariffs of up to 25 percent on imported autos and auto parts as the Trump administration tries to pressure manufacturers to locate plants in the U.S.
"I've been vocally in opposition to the trade policy since President Trump announced it," said Sen. Johnny Isakson, R-Ga. "I got concerned when they dropped the Trans-Pacific Partnership. That really threw me for a loop. Then they started talking about getting out of NAFTA. I'm from a 21 percent agricultural state, and that's a big-time problem for us. It concerns me that we don't have a known commodity in terms of what is our trade policy. We have an environment that's at best uncertain, and it's beginning to show its evidence in the marketplace."
Sen. Lamar Alexander, R-Tenn., chairman of the Health, Education, Labor and Pensions Committee, called the hearing. Tariffs are usually the bailiwick of the Finance Committee, but his state is home to Nissan, General Motors and Volkswagen plants. He used the forum to stress that Tennessee has benefited from free trade, noting that Nissan decided to produce the Rogue crossover at its plant in Smyrna instead of Japan or South Korea because NAFTA's duty-free advantage allowed high-quality production at lower costs.
The senator challenged Trump to work toward eliminating tariffs, an idea Trump floated at the G7 summit this year and that the U.S. and European Union in July agreed to work toward on many products, excluding automobiles, to forestall a trade war.
"Zero tariffs in my view are the right goal. Piling tariffs on top of tariffs are the wrong goal," Alexander said.
Alexander, a former governor and presidential candidate, suggested that the EU could reduce its 10 percent tariff on autos, while the U.S. could lower its 25 percent tariff on light-duty trucks. A graduated approach to lowering tariffs on automobiles by both sides could lead the way to zero tariffs across other product categories, he said.
The hearing also highlighted unease among labor unions with Trump's trade policies, even though they have been harsh critics of trade deals such as NAFTA and tended to align with administration efforts to boost domestic manufacturing by raising the cost of outsourcing.
"The Trump administration's tariffs have been erratically implemented, inconsistently messaged and sometimes apparently motivated by politics or whim. Rather than seeking to coordinate a comprehensive and coherent strategy in conjunction with our allies and complementary to our domestic policies, this administration appears to have no overarching strategy or goal in sight," said Thea Lee, president of the Economic Policy Institute, a think tank affiliated with the labor movement. The approach will mean Americans "can expect to get all of the pain from higher import prices, but little of the gain" through increased exports, jobs and domestic production, she added.