Republican lawmakers say there\u2019s a good chance that President Trump\u2019s trade war will boomerang on Republicans politically in 2026, as rising prices and shrinking growth could offset other accomplishments by the GOP.<\/p>\n\n\n\n
Republican senators are pointing to the 1932 and 1982 elections as historical examples of when trade wars and resulting price inflation hurt their party at the ballot box, and they are worried that history could repeat itself.<\/p>\n\n\n\n
Many Republican lawmakers view tariffs as a tax hike on American consumers, and some note that the last two times Congress enacted tax hikes on the scale of Trump\u2019s recent tariffs, the president\u2019s party suffered a wipeout in the next election.<\/p>\n\n\n\n
\u201cIn the national elections, you can go back to 1982 when I think it was about 26 congressional seats that were lost [by Republicans],\u201d said Sen. Thom Tillis\u2002<\/u><\/a>(R-N.C.), who will be a top Democratic target in next year\u2019s midterm election.<\/p>\n\n\n\n In 1982, then-President Reagan\u2019s first midterm election, the House GOP lost 26 seats amid high interest rates and voters\u2019 sour view of the economy. The Senate GOP lost one seat in that cycle.<\/p>\n\n\n\n That same year, the Congress passed the Tax Equity and Fiscal Responsibility Act, which increased excise and corporate taxes and improved tax compliance \u2014 increasing federal revenue by nearly 1 percent according to the nonpartisan Tax Foundation.<\/p>\n\n\n\n \u201cNo doubt, if we\u2019re having the same discussions about tariffs in February of next year, all the indicators would be \u2018wrong track,\u2019\u201d Tillis said.<\/p>\n\n\n\n He said the Trump administration needs to land the favorable trade deals its promised by February of next year or Republicans could pay a steep political price.<\/p>\n\n\n\n \u201cThey\u2019ve got about 10 months to wrap a bow around this and say, \u2018See, I told you so,\u2019 or you\u2019re going to start seeing political headwinds,\u201d Tillis said.<\/p>\n\n\n\n The other election that looms in lawmakers\u2019 memory is the 1994 contest when Republicans picked up 54 seats in the House and eight seats in the Senate after then-President Clinton\u2002<\/u><\/a>raised taxes by signing the Omnibus Budget Reconciliation Act of 1993.<\/p>\n\n\n\n The Tax Foundation estimated in a Friday report that Trump\u2019s tariffs will increase annual government revenue as a share of gross domestic product by 0.56 percent, the biggest increase since Clinton signed the 1993 tax hike. <\/p>\n\n\n\n Republican senators expressed relief when Trump announced he would drop the steep reciprocal tariffs he announced on most countries for a period of 90 days, but they say the political danger hasn\u2019t passed, noting that Trump slapped a 145 percent tariff on China and China retaliated with a 125 percent tariff on U.S. imports.<\/p>\n\n\n\n While stock markets shot up after Trump announced his 90-day pause on most of the steepest tariff increases they fell back again sharply Thursday amid lingering anxiety about the direction of the U.S. economy. On Friday, markets regained some of those losses.<\/p>\n\n\n\n Lawmakers found the sell-off in the bond markets especially distressing because of its implication for the broader economy. The yields on 10-year and 30-year Treasurys soared this week, hitting as high as 4.59 percent and 4.88 percent, putting upward pressure on borrowing costs for businesses and consumers alike.<\/p>\n\n\n\n The 30-year yield \u2014 the basis for many mortgage rates \u2014 saw its biggest weekly surge since 1982, according to Yahoo Finance.<\/p>\n\n\n\n A senior Senate Republican aide who requested anonymity said that Trump risks fumbling his best issue in the 2024 election, the economy, which was voters\u2019 top priority last year.<\/p>\n\n\n\n A Gallup poll released in October showed Trump with a 9-point lead over his opponent then-Vice President Kamala Harris on the handling of the economy.<\/p>\n\n\n\n An Economist\/YouGov poll published this past week found Trump\u2019s job approval rating dropped by 5 percentage points compared to last week amid the turmoil caused by his tariff announcements. <\/p>\n\n\n\n The tariffs have been a particular worry in farm states.<\/p>\n\n\n\n