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Trump flirts with re-entering massive trade pact

There are signs that President Donald Trump is beginning to get the message from Republicans that his trade threats could harm their constituents as well as the party’s political prospects heading into the midterms. | Evan Vucci/AP

A move to join the Trans-Pacific Partnership would be a stunning reversal for the protectionist-minded president.

Updated

President Donald Trump mollified some of his most ardent trade critics on Thursday, opening up the door to re-engaging in a massive trade deal he campaigned against and reassuring them that a NAFTA renegotiation is on track.

After alarming free-trade Republicans with threats to levy tariffs on up to $ 150 billion in Chinese imports, Trump has reached a temporary truce with them. He told a group of farm-state senators, governors and House members that he directed economic adviser Larry Kudlow and U.S. Trade Representative Robert Lighthizer to examine whether re-entering the Trans-Pacific Partnership trade pact makes sense, a strong signal that he’s heard their concerns.

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“He got it really loudly and clearly today from a lot of us,” said Sen. John Thune of South Dakota, a member of Republican leadership, after the meeting at the White House on Thursday. “If you want to send a message to China, the best way to do that is to start doing business with their competitors. So he was very open to it.”

That’s not to say Republicans are convinced Trump wasn’t just playing to his farm-state audience of lawmakers and governors whose states would be badly hurt by a trade war with China. Trump bashed TPP and NAFTA during the campaign, and his protectionist instincts haven’t changed since.

There’s also a basic issue of whether Trump’s words can be trusted. The president has mused in meetings about changing his position on high-profile issues, from immigration to gun control, only to do the opposite. At one point on Thursday he joked that he would say he’s going to terminate NAFTA if all the Republicans present covered their ears.

“But I’m not going to do that because I want everyone to be happy in this room, OK?” Trump said.

But even Sen. Ben Sasse (R-Neb.), a frequent Trump critic, said he was cautiously optimistic after the discussion.

“We should be leading the TPP discussions. We shouldn’t be outside TPP,” Sasse said. “The fact that the main thing coming out of this meeting is he’s looking at re-entering TPP? That’s pretty good news.”

During the 2016 race, Trump decried the sweeping Pacific Rim trade agreement as “a rape of our country.” He withdrew the United States from the pact on his third day in office.

But in recent months he’s floated the idea that the U.S. could eventually rejoin. Most recently, he said at the World Economic Forum in Davos, Switzerland, in January that he “would do TPP if it were a substantially better deal,” though he offered no specifics as to what he would like to see changed.

Immediately after Thursday’s meeting, the White House sought to keep expectations low. A senior administration official cautioned then that “it’s very early in the process” and that Trump was not committed to anything.

Rather than rejoin the sweeping 12-nation pact, the administration has shown greater interest in negotiating bilateral agreements with individual TPP members. Trump believes that doing so would win the U.S. more favorable terms. But the other members, Japan chief among them, have so far shown little interest in launching two-way talks with the Trump administration.

Sen. Deb Fischer (R-Neb.) said that she came away with the impression that Trump still prefers reaching individual agreements with TPP countries to entering a massive trade pact.

“I did not jump to the conclusion, as some of my colleagues did, that it was like: ‘Oh we’re getting back into TPP,’” she said. “Maybe I’ll be proven wrong on this, but I don’t see this big rush back into TPP.”

That’s in part because the 11 remaining members of the TPP have been focused instead on reworking the deal since the U.S. exit and implementing a new version, which they signed last month. But they are also watching closely to see how the Trump administration handles ongoing negotiations with Canada and Mexico over NAFTA as a precursor to what might happen in their own trade talks.

Chinese President Xi Jinping is pictured. | Getty Images

Still, there are signs that Trump is beginning to get the message from Republicans that his trade threats could harm their constituents as well as the party’s political prospects heading into the midterms. And though administration officials had been entertaining a package worth billions of dollars intended to help farmers harmed by a trade war with China, Trump backed off Thursday when told that farmers don’t want it.

“That was viewed very unfavorably by the heartlanders. The farmers don’t want it. They don’t want a handout,” said Sen. Steve Daines (R-Mont.). “The president was surprised by that. He said: ‘Oh yeah, OK. So we won’t do that.’”

The TPP comments came during a meeting that appeared to be designed to comfort farmers and farm-state lawmakers whose constituents stand to lose the most from escalating trade tensions with China in particular.

“In the end, the farmers are going to be, I think, the biggest beneficiary from all of what’s happening,” Trump said at the start of the meeting, before reporters left the room. “We’re going to take care of the farmers.”

Daines earlier this year got 25 Republican senators to join him in sending a letter to the president earlier urging him to re-engage on TPP. The missive was a sign that, despite Trump’s protectionism, free trade remains the default position for most the party.

Still, Republicans have felt constantly under attack by Trump’s policies. They’ve pleaded for exemptions to his steel and aluminum tariffs and asked with him to stay in NAFTA and rejoin TPP.

How closely Trump is aligned with Republicans will be determined soon: GOP senators said after the meeting that it sounded like NAFTA negotiations could conclude in roughly a month. But for a day, at least, they could breathe a little easier that the president was listening to them.

“He’s listened and been responsive,” said Senate Majority Whip John Cornyn (R-Texas), who had a separate dinner with the president and other GOP leaders on Wednesday evening. “This represents real progress.”

Ben White contributed to this report.

CORRECTION: This story has been updated to correct U.S. Trade Representative Robert Lighthizer’s first name.

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