Trade Subcommittee Leaders Agree Ways and Means Should Oversee USMCA Review
House Ways and Means Trade Subcommittee ranking member Rep. Linda Sanchez, D-Calif., declined to say if she'd join forces with colleagues who want to end the president's ability to impose tariffs under the International Emergency Economic Powers Act, but said, "I certainly think they're on the right track."
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Sanchez was speaking at an event hosted by Politico that included her colleague Trade Subcommittee Chairman Rep. Adrian Smith, R-Neb., who also addressed such legislative efforts. "I don't expect Congress to ultimately have the votes to grab everything back it's delegated," he said.
Smith, whose district depends on corn and other agricultural exports, evaded answering many questions aimed at getting him to defend free trade. The reporter leading the Q&A, for instance, asked him if free-trade partners should be excluded from a global 10% tariff, and he sidestepped the question. Smith did say he was clearly "uneasy" with the proposal of using higher tariffs to offset lower income taxes, as Trump has championed. "I tell people the most successful tariff is one that doesn't generate any revenue," he said. With that comment, he put a finger on the contradiction of the pro-tariff rhetoric the president employs -- if tariffs drive business back to American products, and therefore lead to a manufacturing renaissance, that means people are not buying the now more expensive imports. If the tariffs bring in revenue to pay down debt or offset other tax cuts, then lots of importing continues, and the relative strength of American manufacturing is not significantly changed.
Smith did say that given that Trump campaigned on hiking tariffs, "we have to come to terms with the fact President Trump is going to use those tools." He also said the perspective that the U.S. has opened up its market more than other countries have "is a fair analysis," but signaled that he'd like to see free-trade negotiations get other countries to drop their barriers to trade as a solution. He criticized the Biden administration for abandoning tariff-liberalization talks with Kenya that the first Trump administration started, and said of the Indo-Pacific Economic Framework, or IPEF, "I've nicknamed that I-Puff, because it was such a light touch."
Sanchez criticized Trump's threats of universal tariffs on Mexican and Canadian goods, calling it "a sledgehammer when you should be using a scalpel," and called his trade policy chaotic. She said the offers Mexico and Canada made to secure their borders "were things they had already pledged to do, or were already doing. He has accomplished nothing. It's performative. It's theatrical."
Sanchez noted that many Republicans used to promote free trade, but she said now "they seem to acquiesce to what Trump is doing."
Smith did express a mild caution about how far the new administration should go in hiking tariffs to respond to China's unkept promises to purchase U.S. goods in the phase one deal. "I want to be careful we're not going to see huge increases in costs to consumers," he said.
Politico reporters asked both Smith and Sanchez what their priorities are in the committee in the coming year. Sanchez said hers are renewing Trade Adjustment Assistance and modifying and improving the African Growth and Opportunity Act, and renewing it, as well as oversight of the USMCA review process. Smith agreed on getting a good start on the USMCA review, and warned that Mexico's decree on phasing out biotech white corn "undermines all of rules-based trade."