this Nov. 17, 2016, file photo, House Majority Leader
Kevin McCarthy of Calif. speaks to reporters on
Capitol Hill in Washington. President-elect Donald
Trump’s plan to use steep tariffs to punish
companies that move overseas is running into an
obstacle: Congressional Republicans. McCarthy warned
Dec. 5 that such an approach could cause a trade war.
— President-elect Donald Trump's plan to use steep tariffs
to punish companies that move overseas is running into an
obstacle: Congressional Republicans.
Majority Leader Kevin McCarthy warned Monday that such an
approach could cause a trade war. A better way to achieve
the goal of keeping companies in the U.S. and growing jobs
would be to rewrite the tax code and lower corporate rates,
think that's a better way of solving the problem than
getting into a trade war with a 35 percent tariff," the
California Republican told reporters at the Capitol.
"We've got to have a level playing field, that
companies in America can compete on a level playing field
across the world, and right now we do not have one."
comments came in response to Trump's threat, made in a
series of tweets over the weekend, that he would level taxes
on companies that relocate overseas and then try to sell
their products back into the U.S. "There will be a tax
on our soon to be strong border of 35% for these
companies," Trump wrote.
have typically opposed such tariffs as an intrusion on the
free market, and it was just the latest example of Trump
making a statement or coming up with a plan that flouts GOP
Republican leaders are proving reluctant to challenge the
president-elect, and McCarthy wrangled at some length with
reporters at a pen-and-pad session, disputing suggestions
that he and others in the party are soft-pedaling long-held
beliefs in deference to Trump.
example, Republicans routinely criticized the Obama
administration for taking steps that favored individual
corporations, accusing the administration of "picking
winners and losers." Yet GOP leaders applauded when
Trump got involved to save hundreds of jobs at a Carrier
plant in Indiana last week, even though it came with a cost
to state taxpayers of about $7 million in tax breaks and
think a president wants to get involved any time it's about
jobs being created in America, and I think that's
healthy," McCarthy argued Monday.
moments later, though, he appeared to contradict himself,
asserting: "You want to know my philosophical belief? I
believe in the free market, I don't think government should
be picking winners or losers."
likely need congressional approval to impose tariffs on a
specific company or a group of companies, trade law experts
said. The president has broad authority to impose tariffs on
specific categories of imported goods, but not to single out
individual companies that make them.
Speaker Paul Ryan was also asked about the tariff issue
Monday, in an interview with the Milwaukee Journal-Sentinel
in his home state of Wisconsin. He declined to comment
directly, the paper reported, and, like McCarthy, focused on
tax reform instead.
can get at what he's talking about through smart tax reform.
What his concern is, is legitimate — American companies
are moving overseas, are shifting headquarters and factories
overseas," said Ryan, blaming "our terrible tax
GOP-friendly groups, meanwhile, lined up against Trump's
cuts and deregulation will make the American economy great
again, but tariffs and trade wars will make it tank
again," said Club for Growth president David McIntosh.
"The president-elect is spot on when he calls for
cutting taxes and federal regulations, but 35-percent
tariffs would be devastating to consumers and
Chamber of Commerce chief economist, J.D. Foster, called
tariffs "self-destructive" in an appearance on Fox
Business' "The Intelligence Report with Trish
Regan," adding: "You can make companies want to
come into the U.S. by making the U.S. a better place to do