| | | | |  | | By Ari Hawkins | | Presented by |  | | | With help from Doug Palmer
|  Former Pennsylvania Sen. Pat Toomey contends that President-elect Donald Trump’s tariff proposals would result in a recession and prompt lawmaker backlash. | Kevin Dietsch/Getty Images | | | — President-elect Donald Trump's tariff proposals, if implemented, will spark public and lawmaker backlash once price hikes hit consumers, former GOP Sen. Pat Toomey told Morning Trade. — Mexico's new president, Claudia Sheinbaum, could be unlikely to lift restrictions on planting genetically modified corn or using it in tortilla production. — China warned the U.S. would "lose from confrontation" in a congratulatory message to Donald Trump following his presidential victory. It’s Monday, Nov. 11. Welcome to Morning Trade. Got tips? Suggestions? Want to grab a coffee? Hit us up at: ahawkins@politico.com, gbade@politico.com and dpalmer@politico.com. You can follow us on X: @_AriHawkins, @GavinBade and @tradereporter. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.
| | | | A message from American Energy Action: The expansion of America’s energy industry is revitalizing U.S. shipbuilding and supporting nearly 400,000 jobs across the supply chain. Every dollar spent on shipbuilding amplifies returns in many industries. All these strategic gains are at risk if leadership in Washington fails to understand the value that expanded offshore wind deployment is bringing to U.S. shipbuilding – and to local economies. Tell Washington to support a strong future for America’s shipyards. Learn more. | | | | | 'RECESSION COMING': Former Sen. Pat Toomey (R-Pa.) argues that Donald Trump’s tariff plans will trigger a recession and eventually lead to pushback from Republicans as consumers begin to feel the impact of rising prices. “We have a recession coming. That's what the response would be from a full-blown trade war that [Trump] would precipitate,” Toomey said, referring to the president-elect’s trade proposals. Those include tariffs of up to 20 percent on all imports, tariffs of at least 60 percent on China and more radical positions such as swapping the income tax with tariffs. A new era: Toomey, who was the sole Republican senator to vote against the former president's USMCA in 2020, has a free trade philosophy that was once central to conservative politics. Under a second Trump administration, Republicans are likely to increasingly shift away from that position. “You can look at the person who was his trade representative in his first term,” Toomey said, pointing to Trump’s pick of Robert Lighthizer, who is on the short list again for a number of powerful economic roles in the next administration. “Both Donald Trump himself and his top trade negotiator believe that tariffs are a great thing in and of themselves. We should take them at their word for what they believe,” he continued. Tariff man 2.0: Trump’s vow to reshape the U.S. trading relationship with higher tariffs was a central feature of his presidential campaign — one that may have aided Trump’s sweep of blue-collar workers in manufacturing hubs like Pennsylvania, Wisconsin and Michigan. Toomey said the success of Trump's campaign means Republicans in Congress could be hesitant to challenge the president-elect directly. But once price hikes are passed from manufacturers to consumers, the blowback could spill out into the public. “Businesses will close, people will be laid off, and Congress will hear very loudly from those folks,” Toomey told your host. “There are a lot of folks that realize that trade is very, very good for the United States.” It’s not clear what avenue the president-elect would take to implement his tariff proposals, although he’s signaled he has the power to enact them without the input of Congress. Action on trade is expected during Trump’s first 100 days in office. Still, Toomey believes Trump will have an incentive to work with lawmakers. “Right now, Congress is facing the impending expiration of a number of provisions from the 2017 tax reform,” the former senator said. “There should be very broad support to extend those provisions. That will be scored as lost revenue for the Treasury, and there will be interest in finding ways to offset that lost revenue ... I'm quite sure that it will occur to people that tariffs could be such a source.” Your host has the full interview here (for Pros!).
| | MEXICO CORN CASE RULING SOON: Mexico’s new president Claudia Sheinbaum is unlikely to abandon the country’s restrictions on planting genetically-modified corn or using that grain to make tortillas, despite reports that the United States has won a trade case attacking those provisions, a Tufts University researcher told Morning Trade. “Mexico's restrictions barely affect U.S. corn exports and, as a recent survey confirmed, the restrictions are very popular with the public,” said Timothy Wise, a senior research fellow at the university’s Global Development and Environment Institute. “No one in Mexico wants to be eating GM tortillas, and I seriously doubt the government will abandon its policies, even with a negative ruling from the trade panel." Mexican Economy Minister Marcelo Ebard told reporters on Friday that Mexico and the United States received a preliminary ruling on Oct. 22 from the three-person panel hearing the dispute under the USMCA. Mexico provided feedback last week and is waiting to see how the panel responds, he continued. Bloomberg reported that the final ruling is now expected on Dec. 14, instead of this month. The Office of the U.S. Trade Representative did not respond to questions about the case.
| | | | A message from American Energy Action:   | | | | | CHINA WARNS AGAINST TRADE WARS: Chinese President Xi Jinping sent a message to Trump congratulating him on his presidential victory, which underscored the need for cooperation between the economies, said Foreign Ministry spokesperson Mao Ning. “President Xi Jinping has congratulated President-Elect of the U.S. Donald Trump. President Xi Jinping pointed out that history tells us that both China and the U.S. stand to gain from cooperation and lose from confrontation,” said the spokesperson. When asked directly about the threat of new tariffs under Trump, the spokesperson said they would not answer hypotheticals: “But broadly speaking, let me reiterate that there is no winner in a trade war, nor will the world benefit from it.” POTUS TO LIMA: President Joe Biden is kicking off a trip this week to Lima, Peru , to take part in the Asia-Pacific Economic Cooperation Summit from Nov. 14 to 16 and meet with Peruvian President Dina Boluarte. The trip could be one of the president’s last chances to meet with heads of state before Trump takes office. USTR Katherine Tai is also traveling to Lima for the APEC meetings.
| | | INFO WANTED ON CHIPS: The House Select Committee on the Chinese Communist Party requested information from five semiconductor companies on their sales of manufacturing equipment to China, according to letters sent on Thursday. “As one of the world’s leading semiconductor manufacturing equipment (SME) firms, your company has information that will help us better understand the flow of SME to the PRC and its contributions to the PRC’s rapid buildout of its semiconductor manufacturing industrial base,” wrote committee Chair John Moolenaar (R-Mich.) and ranking member Raja Krishnamoorthi (D-Ill.) to ASML, KLA, Applied Materials, Lam Research and Tokyo Electron. The letters ask the companies to provide information regarding their sales in China, including revenue derived from transactions needing U.S. export licenses, revenue linked to entities listed on various U.S. government blacklists and revenue involving Chinese governmental bodies. The companies were asked to respond to the lawmakers' request by Dec. 1.
| | | | — Canada’s answer to Trump 2.0 worries? Everything’s fine, per POLITICO Pro. — WTO Director-General Ngozi Okonjo-Iweala is unchallenged for a second term as WTO chief, POLITICO Pro reports. — POLITICO Pro Q&A: Rep. John Moolenaar — U.S. ordered TSMC to halt shipments to China of chips used in AI applications, Reuters reports. — U.S. business groups, in a letter to Vietnamese leaders, raised concerns about the country’s proposed data law and asked for it to be delayed. THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and ahawkins@politico.com. Follow us @POLITICOPro and @Morning_Trade.
| | | | A message from American Energy Action: The expansion of America’s energy industry is generating thousands of jobs in the U.S., revitalizing shipbuilding and supporting nearly 400,000 jobs across the supply chain, including steel workers and manufacturers. The ripple effects of shipbuilding are felt in communities across America, including in Texas, Pennsylvania, Wisconsin, and Louisiana, and the supply chain stretches to almost every state in the US. For every dollar invested in shipbuilding, the returns are amplified through the supply chain, benefiting steelmakers, engine manufacturers, and countless other industries. All these strategic gains are at risk if leadership in Washington fails to understand the value that expanded offshore wind deployment is bringing to U.S. shipbuilding – and to local economies. Ask the leaders in Washington to SUPPORT Expanded Maritime Investments vital to American Jobs and Energy Independence that offshore wind can support. Learn more. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
