The White House is softening its stance on trade — if only temporarily — as it seeks to preserve Republican votes on tax reform, according to senior administration officials, congressional aides and outside advisors.
A long-delayed investigation into Chinese steel dumping is on hold; the calls to withdraw from North American Free Trade Agreement (NAFTA) have quieted; and the criticism of the existing free-trade deal with Korea has been snuffed as the Trump Administration actively works to preserve Republican votes for tax reform, the sole issue that unites the party ruling both ends of Pennsylvania Avenue.
Looking at the rosters for the House Ways & Means Committee and the Senate Finance Committee, "the vast majority are free-traders," said one senior administration official, acknowledging particularly hawkish trade actions — like withdrawing from NAFTA or slapping tariffs on steel — wouldn't sit well with that group.
"What we don't want to do is things that will unnecessarily irritate the Senate, because we need the votes there," Commerce Secretary Wilbur Ross said Friday on CNBC's "Squawk Box." "It's a very fragile margin, so it's a question of timing more than it is direction."
One example: John Cornyn, the Senate's number two Republican, sits on the Finance Committee and in June was one of seven GOP senators who signed a letter to USTR Lighthizer arguing for open borders with Canada and Mexico.
"It is reasonable for [Trump] to go through the tax reform process and try to get that done in the next month and a half, so long as they can go full-bore on trade," said Mike Stumo, the CEO of Coalition for a Prosperous America, a nonprofit focused on balancing trade deficits. Stumo expressed worry that the delay was due to "just the 'Government Sachs' crowd finding some way to delay everything because they want unrestricted free trade for their Wall Street buddies."