President Trump’s decision to lift steel tariffs on Canada and Mexico while postponing a fight with the European Union over auto imports leaves him free to focus on China — an escalating trade war in which both sides are digging in.
No new talks have been scheduled with China since the collapse of negotiations two weeks ago, and Mr. Trump is promising $15 billion in aid for U.S. farmers being targeted by Chinese tariffs on agricultural products.
Lawmakers in both parties say the trade agreements with Canada and Mexico announced Friday make it more likely that Congress will approve Mr. Trump’s trilateral deal to replace the North American Free Trade Agreement. U.S. industries including agriculture and bourbon expressed relief that they will no longer be saddled with retaliatory tariffs from the two major U.S. trading partners.
With Republican lawmakers from farm states pressuring the president behind the scenes to back off his trade wars, however, Mr. Trump faces another decision on China: whether to persist with his tariffs and risk the loss of support in red states as his reelection campaign approaches.
“I actually think the president is right to challenge China,” Sen. Patrick J. Toomey, Pennsylvania Republican, said on “Fox News Sunday.” He said China is “in a distinct category separate from” other U.S. competitors.
The tariffs “are absolutely painful and dislocating,” Mr. Toomey said.
“But if, in the end, we end up with an agreement that gives us a meaningful reform of China’s most egregious behavior, we might look back and say this was worth the price that we’re paying,” he said. “China is the world’s second-biggest economy. It’s now, for the first time, attempting to be able to project force. It’s intimidating neighbors. It’s disrupting American institutions. And it has engaged in some egregious economic behavior — the theft of intellectual property in various ways.”
The trade war with Beijing reached a new level last week when Mr. Trump signed an executive order to block Chinese telecommunications companies such as Huawei from selling equipment in the U.S. and when China announced that it would raise tariffs to as high as 25% on more than 5,000 U.S. products starting June 1.
Sen. Mitt Romney, Utah Republican, acknowledged Sunday on ABC’s “This Week” that the costs of the Trump tariffs will be passed on to consumers. Still, he called higher prices for some products “a sacrifice, I think, which is essential to keep China from continuing to kill our jobs and kill our businesses.”
“China’s gotten away with murder for years, where we have looked the other way as they have cheated on foreign agreements and on the international rules of commerce,” Mr. Romney said.
He said tariffs hurt some parts of the U.S. economy more than others.
“Those that are particularly harmed — and those include some farmers, whether it’s pork or whether it’s soybeans — they’re going to need some help to weather the storm, because the president’s not backing down on this,” Mr. Romney said. “China has got to stop cheating in order for us to be able to trade with them on an open and fair basis.”
The 2012 Republican presidential nominee said the administration made a mistake by imposing steel and aluminum tariffs on Canada and Mexico. He said Mr. Trump should have tried to build a global coalition against China’s illegal trade practices.
“Aluminum, steel, all those things should have been put aside until we went on a united basis of pushing back against China,” he said. “But the president has his own negotiating strategy. Perhaps it’ll work out in the best at the end. The only place that I want to see tariffs really pushing against a bad actor is against China.”
Sen. Ben Sasse, Nebraska Republican, said the elimination of tariffs with Canada and Mexico is “certainly great for Nebraska’s agriculture industry.”
“China is our adversary; Canada and Mexico are our friends,” Mr. Sasse said. “The president is right to increase pressure on China for their espionage, their theft of intellectual property, and their hostility toward the rule of law. The president is also right to be de-escalating tension with our North American allies.”
Senate Minority Leader Charles E. Schumer, New York Democrat, added in a tweet, “I’ve always said we should be focusing efforts on China — not Mexico, Canada, Europe. It is good these tariffs will be lifted. We should urge allies to join us in preventing China’s predatory practices.”
Montana Gov. Steve Bullock, a candidate for the 2020 Democratic presidential nomination, criticized Mr. Trump for “going it alone” in the trade war against China.
“‘America first’ has become ‘America alone,’” Mr. Bullock said on CNN’s “State of the Union.” “And it hits producers, farmers and ranchers on both sides. It’s hitting all of us, and we can’t do it that way. We need to bring our allies together and some of our adversaries.”
Sen. Doug Jones, Alabama Democrat, said on the Senate floor last week that his state’s farmers are facing a “dire situation.”
“Many of my state’s farmers — probably most of my state’s farmers — support the president, as do others around the country,” Mr. Jones said. “They have had his back over the last two or three years, even during the campaign. Yet in return, these trade policies have taken money out of their pockets.”
Mr. Trump is counting on farmers to maintain their support for him as he tries to work out a deal, even though tit-for-tat tariffs are making it hard for them to sell their soybeans, swine parts and other products.
“These are great patriots. These are people who don’t want anything, they just want a fair playing surface,” Mr. Trump said Friday at a gathering of the National Association of Realtors in Washington.
Mr. Trump said farmers, who received a $12 billion bailout last year, have told him they don’t want handouts, even as he pursues the subsidies as a way to mollify key supporters in red states.
“You’re the only group that’s ever said that to me,” Mr. Trump recounted telling the farmers. “I said, ‘Man, is that nice.’ Farmers are incredible. I don’t know — they might even be better than the Realtors.”
The president dismissed some of the criticisms about his handling of the economy. He tweeted Sunday that the U.S. economy “is setting records, with more people employed today than at any time in U.S. history.”
Some observers believe Mr. Trump’s decision to postpone trade action on autos and auto parts imported from the EU, Japan and other nations is rooted in 2020 campaign strategy. Automakers and parts suppliers play an important role in the swing states of Pennsylvania, Michigan and Wisconsin, all of which Mr. Trump won narrowly in 2016.
The American Automotive Policy Council, which represents the Big Three U.S. automakers, said the administration’s contemplated auto tariffs “would weaken global competitiveness and invite retaliation from our trading partners, which could harm jobs and investment in the U.S.”
Toyota took exception to Mr. Trump’s proclamation Friday that the level of imported autos to the U.S. poses a national security threat. The automaker said Mr. Trump’s action “sends a message to Toyota that our investments are not welcomed, and the contributions from each of our employees across America are not valued.”
“Between our R&D centers, 10 manufacturing plants, 1,500-strong dealer network, extensive supply chain and other operations, we directly and indirectly employ over 475,000 in the U.S. and have invested over $60 billion in this country, including over $1 billion in philanthropic and community-outreach efforts,” the company said.
⦁ Tom Howell Jr. contributed to this report.