Republican Sen. Josh Hawley of Missouri has introduced a new condition for raising the debt ceiling as House Speaker Kevin McCarthy and President Joe Biden scramble to negotiate a compromise before the U.S. defaults on its sovereign debt.
Hawley seeks to raise tariffs on China in exchange for approving an increase to the nation’s debt limit, which is the amount of money that may be borrowed by the federal government to repay holders of U.S. Treasury bonds. On Wednesday, he introduced legislation in the Senate to that effect, per the text of the bill.
Hawley’s proposal would impose a 25% tariff on all goods imported from China if the U.S. runs a trade deficit with China, according to the bill. The tariffs would be in addition to any others that are already levied on such goods, which includes many Trump administration tariffs still in place.
In an emailed statement, Hawley said that the U.S. runs an “unsustainable bilateral trade deficit” with China and that “[s]trong tariffs on China should be a major part of any debt ceiling agreement.” The U.S. trade deficit with China in 2022 was $382.9 billion, an increase over the preceding three years, according to the Department of Commerce.
Hawley’s proposal comes as Senate Minority Leader Mitch McConnell has repeatedly emphasized that House Republicans, led by Speaker Kevin McCarthy, must take the GOP’s lead in negotiating with President Joe Biden on raising the debt limit. Democrats and Republicans are currently at an impasse in negotiations over federal spending cuts that House Republicans have demanded, which Biden and Senate Democrats have refused to entertain.
On Saturday, 43 Senate Republicans – enough to mount a filibuster against a debt limit bill – sent a letter to Senate Majority Leader Chuck Schumer emphasizing their support of McCarthy’s position, vowing not to support any bill to raise the debt limit that doesn’t include “substantive spending and budget reforms,” according to the letter’s text.
Hawley, however, did not sign the letter. He has previously supported increasing spending amidst the opposition of other congressional Republicans, such as in 2020 when he joined Independent Sen. Bernie Sanders of Vermont to push for a $1,200 direct payment to individuals in COVID-19 relief funds, which was ultimately not included in the bill.
When asked whether Hawley supports the spending reforms sought by House Republicans, which include cuts to discretionary spending, his communications director, Abigail Marone, instead sent the Daily Caller News Foundation a Politico article that describes his tariff proposal.
It’s unclear whether other Senate Republicans, members of the House or President Joe Biden would support Hawley’s proposal. U.S. business groups have been asking Biden to remove Trump-era tariffs, imposed during his trade war with China, arguing that they “undermine U.S. competitiveness,” per Bloomberg News, with Hawley’s bill proposing to add even more tariffs.
The White House, Schumer, McConnell, McCarthy and several members of the House of Representatives did not immediately respond with a comment.
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