McCarthy worries trade war could hurt GOP

House Majority Leader Kevin McCarthy (R-Calif.) is banking on a strong economy helping his party in November’s midterm elections — unless a burgeoning trade war sparked by tariffs implemented by the Trump administration puts the brakes on growth.

In an interview Sunday, McCarthy said strong economic data and voters’ increasingly positive views of the direction of the country were helping Republicans ahead of the midterms.

“I think the economics is why we’re coming back,” McCarthy said. 

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Recent polls show Republicans only narrowly trailing Democrats in generic ballot questions that test whether one party has an edge in the race for control of Congress. An Economist/YouGov poll conducted last week showed Democrats with a slim 3-point edge. A Reuters/Ipsos poll conducted about the same time showed Democrats up just 2 points.

But some Republicans are nervous that Trump’s new tariffs on steel and aluminum imports from the European Union, Canada, Mexico, China and other countries could lead to retaliatory measures from those countries that could become a drag on the economy.

Some of those retaliatory tariffs could target goods produced in California, such as almonds, walnuts and wine — products that also come from McCarthy’s Bakersfield-based district. 

Republicans are already on defense in the Golden State, where they are defending seven districts that Hillary Clinton won in the 2016 presidential election. If voters in those districts see a trade war impacting their bottom line, it would likely further complicate Republican efforts to maintain the majority. 

While McCarthy represents a heavily Republican district, GOP Reps. Jeff Denham and David Valadao represent farming districts that gave Clinton more votes than Trump in 2016.

McCarthy said negotiations between the United States and its top trading partners are still playing out, and that there is plenty of time to resolve the disputes.

“I think it’s still early. We’ve got to see how the negotiations turn out. I don’t think anybody wins a trade war,” McCarthy told The Hill. “Opening up more markets is a positive thing, so we’ll see how the discussion turns out.”

In a separate interview Sunday on CNN’s “State of the Union,” McCarthy said the country is not yet in a trade war.

“We’re in a trade discussion to renegotiate [the North American Free Trade Agreement],” McCarthy told CNN.

Minutes later, Canada’s Minister of Foreign Affairs Chrystia Freeland told CNN she did not believe the negotiations were a “discussion.” Prime Minister Justin Trudeau called the U.S. decision to impose tariffs on national security grounds “insulting and unacceptable.”

In Washington, other Republicans are sounding more strident alarms. On Monday, Sen. Bob Corker (R-Tenn.) said his office was working on legislation that would limit Trump’s power to implement the tariffs, though the Senate’s number two Republican, John Cornyn (Texas), cast doubt on the chances of such a measure passing.

Three outside groups affiliated with the conservative Koch brothers network said on Monday they would spend millions of dollars on advertisements meant to push back against the tariffs.

McCarthy, a Trump ally, said he had spoken with the president about the dispute between the United States and some of its closest allies.

“We’ve talked about tariffs and free trade all year,” he said.