Democratic senators urge Trump to revamp China trade ties, revise free trade deals

By Andrea Shalal

WASHINGTON (Reuters) - Three Democratic senators on Monday urged U.S. President Donald Trump to "dramatically revise" the United States' trade relationship with China along with 14 free trade agreements, providing a boost to his push to revamp U.S. trade policy.

In a letter to the Republican president, Senators Tammy Baldwin of Wisconsin and Gary Peters and Elissa Slotkin of Michigan welcomed the comprehensive review of trade policy Trump has ordered and his push to rebuild the U.S. manufacturing base.

Trump has upended U.S. trade policy and unsettled financial markets with a series of tariffs aimed at competitors like China and neighbors like Canada and Mexico and specific sectors like autos and metals. He plans to announce more tariffs aimed at all countries with big trade surpluses on Wednesday.

The policies have sparked criticism from free trade groups and some firms, but also support from unions and some Democratic lawmakers, underscoring the bipartisan nature of concerns over the loss of 4.3 million manufacturing jobs since 2001.

The Democratic senators said changes were urgently needed after what they called flawed trade decisions made by Democrats and Republicans on trade ties with China and other countries, while calling on Trump to keep the needs of workers in mind.

"Free trade and globalization have left us with offshored manufacturing, devastated communities, workers out of a job or in jobs with lower wages, and supply chains overly dependent on our adversaries in too many areas," they wrote, noting that their states had suffered disproportionately.

The senators urged Trump to focus on a "pro-American worker trade policy" by rethinking a 2000 decision to grant China permanent normal trade relations status, which paved the way for its entry into the World Trade Organization.

The Trump administration should also rethink its 14 free trade deals with 20 countries, including the U.S.-Mexico-Canada Agreement and take steps to strengthen trade enforcement mechanisms, including through ending a trade rule called "de minimis" that allows goods valued at less than $800 to enter the country duty-free and with minimal inspections. 

Trump ordered the end of the loophole, which allowed nearly 1.4 billion packages to enter the U.S. last year, but quickly paused it due to logistical issues.

The senators said they viewed Trump's favored instrument of tariffs as an important tool for leveling the playing field, but noted that it could take years to impact supply chains.

To ensure the tariffs worked, the administration also needed to make investments, enact Buy America requirements and tax incentives, like those in the Inflation Reduction Act passed under former President Joe Biden that Trump has vowed to undo.

Steps were also needed to keep corporations in check with equitable tax rates and strong antitrust laws, and empowering workers to join unions, they said.

(Reporting by Andrea Shalal; Editing by Paul Simao)