Trump’s tariffs squeezes Republicans as they struggle to pass his agenda – UK Times

If President Donald Trump hoped to get a better day on Wall Street two days after his massive tariff announcement, he was sorely mistaken.

The Dow Jones Industrial Average closed on Friday losing 2,231.07 points, or 5.50%, another brutal dive.

Federal Reserve Chairman Jerome Powell spoke to journalists at a business reporters’ conference Friday and while he did not comment on politics, he did offer a withering assessment of the effects of the tariffs.

“While uncertainty remains elevated, it is now becoming clear that tariff increases will be significantly larger than expected, and the same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Powell said.

Trump nominated Powell to lead the central bank in 2018, and Powell earned such plaudits for the way he handled the economic fallout from the Covid-19 pandemic that Joe Biden renominated him. But just before Powell made his remarks, Trump sent a message to the chairman via Truth Social.

“He is always ‘late,’ but he could now change his image, and quickly,” Trump said on his social media platform.

“Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months — A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

Trump’s decision to wage a trade war came at a point that forced maximum pain for Republicans and when his domestic agenda hangs in the balance.

Republicans historically have not liked tariffs and have supported free trade as part of their larger ideology that barriers to business stifle competition and kill jobs. Trump’s style of nationalism refuted that position, and his first speech as president denounced free trade deals.

Now Republicans find themselves in a difficult place when they might need to defy Trump for political and policy reasons.

On Wednesday, Iowa Senator Chuck Grassley, the senior-most Republican, told The Independent before Trump’s announcement that he worried the tariffs would drive up the cost of potash, which farmers use to grow soybeans and corn.

That evening, four Republicans — Lisa Murkowski of Alaska, Susan Collins of Maine and Kentucky’s Rand Paul and Mitch McConnell-— joined the Democrats to pass legislation that would roll back Trump’s tariffs on Canada.

By Thursday, Grassley announced that he and Democratic Senator Maria Cantwell of Washington would co-sponsor legislation that would require a president to explain the rationale and effects of new tariffs. The bill would also mandate that any new tariffs would expire without the approval of Congress.

Grassley is not the only one sweating the effects of tariffs. Senator Ted Cruz of Texas, an archconservative who hails from a state that shares a border with Mexico, warned on his podcast that the tariffs will raise the cost of automobiles immensely.

“It’s not just foreign cars that will go up; all the American cars, their prices are going to go up, too,” he said, adding that a manufacturer from one of the major automobile companies in the United States told him that by June, the price of American-made cars would jump by $4,500.

All the while, Republicans in the Senate are hoping to begin the heavy lifting of passing Trump’s agenda. Later on Friday evening, the Senate will begin a “vote-a-rama” for amendments to pass a budget resolution that would allow them to begin negotiating the details of the “one, big, beautiful bill” to drive through Trump’s domestic policy agenda.

That would only be the beginning of the Senate’s problems though. The Committee for a Responsible Federal Budget flagged that the proposed legislation would add almost $6 trillion to the debt with only a pittance of spending cuts.

This will likely infuriate House Republicans, whose budget resolution calls for $4.5 trillion in tax cuts only if the House finds $2 trillion worth of spending cuts. Democrats have said that the $880 billion worth of spending cuts that the House Energy and Commerce Committee needs to find would come out of Medicaid.

All of this comes as Trump’s proposed tariffs will eat away at Americans’ wallets, and while their retirement savings get crushed in the stock market.

As Trump’s approval rating continues to take a hit, Republicans will feel a continued sense of urgency to pass his agenda, but that would make it even more politically unpopular.