Senate Republicans on Monday grew increasingly nervous after President Trump's comments over the weekend that some of his tariffs could be permanent and that things would be “OK” even if the U.S. experienced a short-term recession.
Republicans have been on edge for weeks as the Trump administration’s hemming and hawing on tariffs have created instability in the market and questions about the White House’s handling of the economy.
Now, GOP lawmakers acknowledge the president’s refusal over the weekend to rule out the possibility that some of his levies could remain in place in the long term, coupled with his remarks on the possibility of a recession, constitutes a one-two punch that is spooking consumers.
“I think there’s just a lot of uneasiness,” said Sen. Shelley Moore Capito (R-W.Va.), a member of GOP leadership. “They keep saying they’re close to a deal with a country, so I think that would be helpful to show that there’s progress here. I think people are sort of wondering where this is all going to lead.”
Capito noted the positive employment numbers that emerged last week, which came on the heels of data showing that the economy contracted during the first quarter by 0.3 percent on an annual basis. She conceded, however, that even if the U.S. achieves its economic goals in the long term, even a temporary economic dip could do lasting damage.
“There is a lot of angst out there. … He was elected on the economy. He’s a dealmaker in the economy space, so he has big expectations of himself,” she said. “He fulfilled them in the first term, he thinks he can fulfill them in the second and, so far, I believe he will.
“But America — we don’t necessarily have a lot of tolerance for pain,” Capito said.
In the first 100 days of his administration, Trump slapped heavy tariffs on allies and adversaries alike, only to temporarily backtrack on many of them in search of deals. At the same time, some massive levies have remained in place, most notably the 145 percent tariff on imports from China.
This has created uncertainty in the economy and on Wall Street that has made it difficult for businesses and consumers to operate and make plans.
The president’s remarks came during a lengthy interview with “Meet the Press” on Sunday, tossing another wrench into the questions surrounding the administration’s trade plans.
“If somebody thought they were going to come off the table, why would they build in the United States?" Trump told host Kristen Welker about the idea of making some tariffs permanent.
Trump also indicated that a short-term recession would be worthwhile if it is followed by the realization of his economic goals.
“Look, yeah, it’s — everything’s OK,” Trump said about that possibility. “This is a transition period. I think we’re going to do fantastically.”
Trump added that he is not worried about a possible recession but indicated it’s a possibility.
“No,” Trump replied, offering the concession. “Anything can happen, but I think we’re going to have the greatest economy in the history of our country.”
Senate Republicans have in recent weeks downplayed the possibility of a recession coming to fruition. The tariffs, though, have been front of mind, especially for scores of members who represent farming and agriculture-heavy states.
While they applaud Trump for trying to score deals, they have little appetite for some of the levies to stick around longer than they have to — let alone on a permanent basis.
“I don’t like the idea of permanent tariffs unless we can’t come to an agreement with other countries on fair and free trade,” Sen. Mike Rounds (R-S.D.) said.
“I think tariffs have a purpose, but the purpose is to bring free trade and fair trade,” he continued. “I don’t really care to simply have it be a cost our consumers are going to have to pay for those overseas products if there isn’t a product in the U.S. that they can purchase as an alternative.”
Top trade and economic advisers indicated last week that they are in active negotiations with numerous countries in search of deals to stave off the massive "reciprocal" tariffs Trump levied last month. Sen. John Kennedy (R-La.) on Monday pegged that number at roughly 40 countries.
Senate Republicans pleaded with U.S. Trade Representative Jamieson Greer last week to roll out the individual trade deals as they happen instead of in one big unveiling this summer due to consumer nervousness. Members indicated that they expected those to start arriving in the coming weeks.
Treasury Department Secretary Scott Bessent appeared on Monday at a Milken Institute conference in an attempt to persuade the nation’s wealthiest that it is time to invest in the economy, citing the tax cuts the GOP is hoping to pass this summer and slashing regulations on top of the tariffs.
“They are interlocking parts of an engine designed to drive long-term investment in the American economy,” Bessent told investors. “The result of the president's economic plan will be more. More jobs, more homes, more growth, more factories, more critical manufacturing plants, more semiconductors, more energy, more opportunity, more defense, more economic security, more innovation.”
Bessent also told CNBC that there could be “substantial progress in the coming weeks” in trade talks with China.
“We’ll see,” he added.
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