Why U.S. vs China “Trade War” Could Speed Long-Awaited Infrastructure Deal
Washington D.C. – President Trump is pushing for a new $2 trillion infrastructure plan as a “hedge” against potentially negative economic impacts a new round of tariffs on Chinese imports could bring to the U.S. economy.
That’s the belief of long-time friend, political advisor, and supporter of President Trump, former New Jersey Governor Chris Christie.
On Sunday’s “This Week with George Stephanopoulos,” Christie said, “There is no doubt in my mind that the reason he is pushing for that ($2 trillion infrastructure plan) now is because he is concerned that because of the tariff policy there might be some slow down on it.”
President Trump announced last week that his administration would be increasing existing 10% tariffs up to 25% on $200 billion worth of Chinese goods coming into the U.S.
The tariff increase became effective as of Friday, May 10, and is in response to trade talks between U.S. and Chinese negotiators coming to a halt last week.
The trade war escalated again on Monday as the Chinese Finance Ministry announced it would raise tariffs on $60 billion worth of U.S. imports beginning June 1, 2019.
Beijing will increase tariffs on more than 5,000 products to as high as 25%. Duties on some other goods will increase to 20%.
Those rates will rise from either 10% or 5% previously.
Global trade markets were shaken by the news and many economists worry the growing trade battle will have a negative impact on the U.S. economy.
Christie said President Trump understands the potential short-term pain for some, and that’s one reason he is moving quickly on a big infrastructure deal with Democrats.
“So what he wants to do is pump $2 trillion into the economy through infrastructure which will help to hedge against any damage from the tariffs,” Christie said.
On Tuesday, April 30, Democratic leaders Sen. Chuck Schumer (D-NY) and Rep. Nancy Pelosi (D-CA) emerged from a meeting at the White House and announced they had reached an agreement with President Trump on an infrastructure deal with a price tag of $2 trillion.
“The ball is in the president’s court to come up with pay-fors,” Sen. Schumer said after a meeting to a gaggle of reporters. “We told him unless he is willing to come up with the pay-fors for this large package, it will never get done.”
The sticking point on any new infrastructure spending plan is always how to pay for it which is one of the reasons why President Trump said in a recent tweet “there is nothing easy about a USA Infrastructure Plan.”
However, Christie, who ran for president in 2016 before dropping out and endorsing his rival Mr. Trump, said he believes getting an infrastructure plan accomplished is not only good for the country, but it’s good politics heading into a 2020 presidential contest.
“He (President Trump) knows he’s not going to get two trillion, so he’ll start with two trillion and declare victory at one trillion and he has the Democrats saying they are for it. Think about that. If he gets a bi-partisan win on infrastructure and gets a trillion dollars pumped into the economy pre-election, he’ll win,” Christie predicted.
Any reason that might spur legislators to pass a meaningful infrastructure spending bill will be welcomed by many trucking stakeholders who have long advocated for action to rebuild America’s dilapidated roads and bridges.
However, the question of whether Democrats will want to give President Trump a political win on infrastructure in the lead up to the 2020 presidential election is a good one.
As 2020 looms, some political observers do not believe the Democrats are serious about reaching a deal, pointing to the Democratic leadership’s insistence on rolling back part of President Trump’s signature tax cut legislation as part of any infrastructure agreement.
Republicans have called such a position a “non-starter” in any negotiation on infrastructure.
Prominent Democrats are hurling accusations that it is really the GOP that isn’t serious about making a deal.
Former Chief of Staff to President Obama, and current mayor of Chicago, Rahm Emanuel, also appeared with Christie on Sunday’s “This Week.”
He lowered expectations that any infrastructure deal could get done, calling President Trump and his party’s sincerity on the issue “a joke.”
“I don’t think Republicans will put a $2 bill on infrastructure. It’s a joke and everybody knows it’s a joke,” he said.
The talks are set to continue in a couple of weeks when President Trump will meet once again with Democratic leaders to try to hammer out a deal.
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