Pandemic roils GOP views on trade with China

Key Republican senators urged President Trump on Monday not to let rising tensions with China upset bilateral trade at a time when the U.S. economy is reeling from the coronavirus. 

But support for strengthening trade with China along the lines of what GOP lawmakers expected a few months ago has weakened amid growing backlash to Beijing’s perceived role in letting the coronavirus outbreak become a global pandemic.

GOP lawmakers are also angry that China redirected vast quantities of medical supplies toward its domestic needs, resulting in critical shortages of personal protective equipment (PPE) in the United States.

While some free-trade proponents in the Senate Republican Conference want Trump to stay the course and complete a broad deal with the world’s second-biggest economy, others are rethinking their positions. 

Sen. John Cornyn (R-Texas), a prominent member of the Senate Finance Committee, which oversees trade issues, called for a “reevaluation” of U.S.-China trade.

“It seems like our relationship with China is just continuing to deteriorate,” Cornyn said Monday, pointing to reports that Chinese officials may have known about the threat posed by the coronavirus in early December, weeks before informing the World Health Organization.

“We’re pretty confident they hid the information in order to martial the PPE and otherwise protect themselves at the expense of the rest of the world,” Cornyn said. “We have to deal with China, one way or the other, but I would say that relationship is more strained now than before.”

Asked specifically about the implications for a trade deal, Cornyn responded, “The coronavirus sort of upended everything, and so I think a reevaluation is in order.”

Senate Republican Conference Chairman John Barrasso (Wyo.) said the United States cannot allow its supply chains to rely so heavily on Chinese good faith.

“Never again with relation to China. We need to make sure we’re never again dependent upon China for critical supplies, materials, medicines,” he said. “We can talk about … the best way to do it.”

He noted that Sen. Tom Cotton (R-Ark.) has introduced a bill that would lift sovereign immunity law and allow American citizens to sue the Chinese government for damages resulting from the coronavirus pandemic. 

Cotton has accused top Chinese officials of making “a deliberate and conscious choice” to let the virus spread rapidly around the globe “because they did not want to see their relative power and standing in the world decline because this virus was contained within China.”

Senate Judiciary Committee Chairman Lindsey Graham (R-S.C.), another prominent voice within the Senate GOP conference, said last month that “China needs to pay.”

Cornyn and Graham hail from traditional GOP strongholds and both face surprisingly competitive reelection fights this year.

Cornyn is ahead of his potential Democratic opponents, but a recent Dallas Morning News/University of Texas poll showed a large number of voters undecided. Graham, meanwhile, was outraised by his Democratic opponent in the first three months of 2020 and Democratic polls show the race closer than expected.

Republicans, especially those up for reelection, have sought to deflect anger over the federal government’s response by pointing the finger at China.

Senate Majority Leader Mitch McConnell (R-Ky.), who is also up for reelection and has to contend with weak approval numbers at home, accused Chinese officials of making the crisis worse.

“The virus’s spread was exacerbated by China’s unconscionable efforts to cover it up,” he said on the Senate floor.

He cited the Chinese government’s arrest of Li Wenliang, a doctor who tried to blow the whistle on the emerging public health crisis, and faulted Beijing for donating medical supplies to foreign countries that turned out to be faulty or unusable.

The GOP leader predicted officials in Washington would review “strategic vulnerabilities” stemming from U.S.-China relations.

Peter Navarro, one of the president’s top trade advisers and a hard-line critic of Beijing, told CNBC on Monday that “a bill has to come due for China.”

“It’s not a question of punishing them. It’s a question of holding China account[able], the Chinese Communist Party account[able] for what it did not just to the American people, the American workers, American children, American senior citizens but also to the rest of the world,” he said.

Navarro suggested that as a result of the pandemic, future trade negotiations would push to relocate critical supply chains back to the United States.

“What this president wants to do, president Donald J. Trump, is what he’s wanted to do since he ran for office, which is to bring our supply chains and production home here,” he said.

Other key Republicans have argued that the coronavirus pandemic shouldn’t derail the prospects for a broader trade deal with China beyond the initial phase signed in mid-January.

“The deal at least that was negotiated, the phase one, is something we hope that gets done because they have been buying soybeans and some things — [agricultural] products and commodities,” said Senate Republican Whip John Thune (S.D.).

“I don’t think it’s mutually exclusive to have some strong differences of opinion and disagreements with China on other issues and still realize that they’re a huge market and we’re a huge market. We’ve got to figure ways to cooperate economically,” he added.

Sen. Rob Portman (R-Ohio), who noted China hasn’t fully lived up to its commitment to buy U.S. agricultural products, argued a bilateral trade deal would be good for the United States.

“I don’t think there’s any reason for us to pull back, it’s a good agreement for us,” he said.

The Center for Strategic and International Studies, a Washington-based think tank, issued a report Friday projecting that China may wind up purchasing only about $60 billion in U.S. goods this year,  well short of the $186 billion China promised to buy in the first phase of the trade agreement.

Still, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said Monday that “the trade deal should go ahead.”

Lack of transparency on the coronavirus, he argued, is a separate issue that the World Health Organization should handle.

“Right now the focus ought to be on getting the information for China to be transparent and the World Health Organization is the ones that should be doing it,” Grassley said.

Trump on Monday sought to blame China directly for more than 80,000 deaths in the United States.

Asked about the number of Americans dying daily, Trump told a reporter at a White House press conference Monday to “ask China.” 

Trump admitted on Friday that he is “very torn” about whether to discard phase one of the U.S.-China trade deal or move ahead with a broader agreement that would resolve the long simmering trade war between the two global economic powers.

“Let’s see if they lived up to the deal they signed,” he said on Monday.