Senator Ted Cruz, usually a staunch supporter of President Donald Trump, sounded the alarm on the administration’s move to ramp up tariffs, saying they pose “enormous risks” to the US economy and make Republicans vulnerable to a “bloodbath” in next year’s midterm elections.
Long-term trade duties would drive up inflation and wreak havoc on markets, Cruz said on his podcast, which was released Friday as a deep selloff hammered US stocks for the second straight day. The economic fallout could help Democrats reclaim the House of Representatives and possibly even flip the Senate, although that’s less likely, he said.
“It would destroy jobs here at home and do real damage to the US economy if we had tariffs everywhere,” said the Texas Republican.
Cruz’s critique echoes the doubts of four Republican senators who this week rebuked Trump by siding with Democrats to back a measure that would have terminated the president’s previous levies on Canada. As markets tumbled Thursday, a bipartisan group of senators — including Iowa Republican Chuck Grassley — introduced legislation that would require congressional approval for new tariffs. Cruz said Thursday he was studying that proposal.
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Texas accounts for about 16% of US trade, the most of any state, making it vulnerable to any downturn spurred by stepped-up tariffs, according to the Federal Reserve Bank of Dallas.
Oil, another key Texas industry, plummeted Thursday after the Organization of the Petroleum Exporting Countries and its allies agreed to a larger-than-expected supply increase. Oil sank further on Friday amid worries that economic weakness will cause demand to slow.
Cruz specifically called out the risk to the automobile industry, which relies heavily on trade across the Texas border with Mexico. He said an executive from a major automaker told him the tariffs would prompt a $4,500 increase in the average price of the company’s vehicles, probably starting in June.
The Texas senator said it would be a “home run” for Trump if he uses the tariffs to lower global trade barriers and then removes them.
“We’ve all seen Donald Trump’s negotiating style is frequently to pick up a 2 by 4, smack someone in the head with it, and then negotiate down from that,” Cruz said. “If that’s what’s going on, yesterday was a 2 by 4.”
But he warned that many corporate executives haven’t factored in how committed the administration may be to long-term trade duties.
“The business community has systematically underestimated how much President Trump and the Trump administration views tariffs as an ongoing, permanent feature of our economic policy,” he said.
