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State & Regional Govt & Politics
David Perdue warms to Trump’s trade strategy
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David Perdue warms to Trump’s trade strategy

David Perdue warms to Trump’s trade strategy

David Perdue warms to Trump’s trade strategy

When President Donald Trump was considering whether to slap tariffs on foreign-made steel and aluminum more than 18 months ago, Georgia U.S. Sen. David Perdue gingerly offered some of his only public criticism of his political ally to date.

The first-term Republican cautioned that overly broad duties would be “problematic” and suggested the White House let the economy “breathe a little while” to allow the 2017 tax overhaul to take hold.

Yet in the time since, Perdue has inched closer to Trump’s position as both men have ramped up their re-election campaigns. The shift comes as Perdue broadcasts his close ties to the president, who remains broadly popular with Republicans in Georgia.

Perdue’s office insists his position on tariffs hasn’t changed. Perdue’s public comments, however, have become more forceful in support of Trump’s strategy as trade talks with China have dragged on. Tariffs, Perdue now says, are an imperfect but effective way of forcing Beijing to the negotiating table.

“What the president is doing is exactly what he should be doing,” Perdue told an Augusta TV station before meeting with China’s top trade negotiator with Trump’s blessing this August.

“For the first time in five decades, we are standing up to the Chinese and other trading partners around the world and all we want is equal access and a level playing field,” he said. “The tariffs are creating the opportunity for people to come to the table.”

Perdue has made his decades of private sector experience central to his political identity. But the very companies he once led, Reebok and Dollar General, are either critics of the trade policy he now defends or have warned they will need to raise prices on their customers.

Perdue’s stance has drawn the attention of several of his Democratic opponents, who argue he’s given up his credibility on business issues in exchange for Trump’s approval and is advocating for a hardline trade policy that’s causing harm to local consumers, farmers and businesses.

“He’s a former Fortune 500 CEO. He knows better,” said business executive Sarah Riggs Amico, who ran for lieutenant governor last year. 

‘Competitive disadvantage’

Perdue credits his time living in Hong Kong for Sara Lee Corp. for helping shape his views about trade and the economy, as well as his work on international retail, manufacturing and supply chains for Dollar General and Reebok, large corporations whose business models revolve around robust global trade and a pipeline of low-priced goods from countries like China and Mexico.

Democrats sought to frame that business experience as a liability when Perdue ran to replace Saxby Chambliss, especially after a transcript from a 2005 deposition quoted Perdue confirming that “I spent most of my career” outsourcing.

After his comments leaked to the press, Perdue said Washington policies were what pushed U.S. companies to look abroad.

Soon after arriving in the Senate, Perdue voted with many of his GOP colleagues to grant President Barack Obama fast-track trade authority as the White House raced to finalize the Trans-Pacific Partnership.

Perdue said increasing trade opportunities would be a boon for Georgia’s economy. He also took pains to emphasize the bill’s oversight provisions over the Obama administration.

“It’s not perfect. No trade agreement is perfect in this world. But I think this goes a long way to allowing us to compete,” Perdue told The Atlanta Journal-Constitution ahead of the vote. “We’ve got to grow our exports. That’s one way to grow the economy.”

That view, however, came before Trump received the GOP nomination for president on a populist platform that included withdrawing from the Trans-Pacific Partnership, renegotiating trade deals and confronting China on its practices. And it forced many Republicans to revisit their long-held support for free trade.

For Perdue, who has frequently touted Trump’s economic agenda, a key moment came in March 2018 when the president raised the prospect of steel and aluminum tariffs. He met privately with then-White House Chief of Staff John Kelly to argue that blanket tariffs were the wrong approach.

“The president’s instincts are right that we need access in these markets,” Perdue later told reporters. “But (tariffs) need to be very targeted.”

But Perdue refused to go as far as other GOP senators, including his Georgia colleague Johnny Isakson, who introduced legislation requiring Congress to sign off on any tariffs levied in the name of national security.

‘Right thing to do’

Since then, Perdue has bridged the gap with Trump on the issue, even as he’s continued to acknowledge that tariffs are “not my favorite tool.”

The Georgian didn’t protest as Trump imposed a series of tariffs on consumer goods from China and the European Union.

He’s spoken out more and more against Beijing’s trade practices, which he argues are unfair and in violation of World Trade Organization rules, and has lambasted Senate colleagues for undermining the president during high-stakes negotiations with the country.

Perdue has traveled twice to China the last two years, and in recent speeches suggested that any short-term pinch Georgians might feel from increased prices will prove worthwhile in the long term.

“We will suffer some pain inside this country for a while, but this is the right thing to do long term to get China to stand up and do the right thing relative to our trade relationship,” Perdue said in a recent appearance on CNBC.

His position puts him at odds with many economists and corporations, including his former colleagues at Reebok, who warned in a May letter to the president that a proposed 25% tariff on Chinese footwear would have a “catastrophic” impact on their business.

“It is an unavoidable fact that as prices go up at the border due to transportation costs, labor rate increases, or additional duties, the consumer pays more for the product,” Reebok and nearly 200 other footwear brands wrote.

Dollar General’s chief financial officer said on an earnings call in May that despite the company’s efforts to minimize the impact of tariffs on its customers, “we believe our shoppers will be facing higher prices as 2019 progresses.”

In a June letter to the administration, more than 660 companies including Walmart and Target predicted that escalating tariffs would result in job losses, reduce the U.S. gross domestic product and cost the average American family. And then there are the local farmers who, already reeling from Hurricane Michael and years of low commodity prices, fear that their crop exports to China could be replaced by competitors like Brazil.

Trump’s recent Chinese tariffs, however, have received praise from some surprising corners of the Senate. Minority Leader Chuck Schumer, D-N.Y., urged the president to “hang tough” against Beijing earlier this year.

“They’ve taken advantage of us,” Schumer said in August. “America has lost trillions of dollars and millions of jobs because China has not played fair. And being tough on China is the right way to be.” 

Perdue has urged the White House to carve out exceptions for some Georgia industries reliant on goods only made in China, such as ship-to-shore cranes that will soon be used to unload cargo at the Savannah port. He also asked the administration to prioritze lowering pecan tariffs during trade talks with India and exempt certain aluminum products like those used by Coca-Cola and Anheuser-Busch to manufacture beverage cans.

‘Devastating’ impact

Perdue’s trade stance has drawn criticism from several of the Democrats aiming to unseat him in 2020.

Former Columbus Mayor Teresa Tomlinson said Perdue’s position on tariffs is just one example of how he’s an “enabler of Trump.”

“Here’s a man that in his history didn’t like tariffs because he recognized them as taxes,” she said. “Now he’s wholeheartedly behind this tariff war that’s running not just our ag but other industries into the ground and causing consumers to have increased prices and market instability and threatening this long recovery.”

Amico, who has put her business experience at the center of her campaign for Senate, said Trump’s steel and aluminum tariffs have had a “chilling effect” on her car-hauling company, which recently filed for bankruptcy protection.

She said Perdue has been cavalier about the impact of tariffs on farmers, manufacturers and others in Georgia.

“This isn’t short-term pain if you’re a family farmer losing your family’s legacy in your farm. It’s not short-term pain if … you’re a factory town and the factory closes,” she said. “Those are real lives that are being hurt by a reckless trade war that nobody’s going to win.”

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