The U.S. Chamber of Commerce and other pro-trade groups have influential allies among Republicans who lead both chambers of Congress. While many say they are willing to consider Trump's proposals, including to recraft some trade deals, they also say they've long seen benefits to free trade in their home states and to the U.S. economy.

“My state is the No. 1 exporting state in the nation, and not coincidentally our economy tends to be doing better than a lot of the rest of the country,” John Cornyn of Texas, the No. 2 Senate Republican, told reporters this month. Cornyn, who leads the Senate Finance subcommittee on trade, said he views Trump's campaign promises on trade as the starting point in a debate.

“It's a conversation,” he said. “Nobody gets to set the agenda unilaterally around here because of the separation of powers.”

In a videotaped speech last week, Trump vowed on day one of his presidency to issue a notification of intent to withdraw from the 12-nation Trans-Pacific Partnership, which he described as “a potential disaster for our country.”

The U.S. Chamber pulled few punches in criticizing Trump during the campaign. In March, its president, Thomas Donohue, said Trump had “very little idea” of what trade actually was. And in June the chamber used Twitter to critique in real time an economic address Trump gave, saying his proposals for tariffs would cost millions of American jobs.

Since the election, the business group has stressed areas of agreement with the president-elect. Vice President-elect Mike Pence met Nov. 16 with the chamber's board of directors, and enlisted the help of the business community and outlined opportunities for working together, said Blair Latoff Holmes, a spokeswoman for the chamber.

Business groups have a history of pushing back against Washington on trade issues with China. In the 1990s, companies including Boeing Co., Motorola Inc. and American International Group Inc. were involved in lobbying efforts in the annual battle to renew China's most-favored nation status that gave its exports low-tariff status in the U.S. In 2011, trade groups representing companies including Microsoft Corp. and Wal-Mart Stores Inc. lobbied against legislation to pressure China to raise the value of its currency.

History is also replete with counter punches from China when punitive actions have been taken.

The U.S.-China Business Council, a Washington-based group representing more than 200 companies doing business in China, wrote a letter to lawmakers in 2011 to argue that unilateral legislation on the issue of the yuan would be counterproductive. That came after Senator Chuck Schumer, a New York Democrat, sought to reintroduce legislation aimed at forcing China to raise the value of its currency. No legislation was passed.

Schumer will be Senate Democratic leader in the next Congress, meaning there could be shared ground when it comes to Trump's threats to label China a currency manipulator.

Still, there's hope among businesses that once in office President Trump will tone down campaign calls. China International Capital Corp. in Beijing says a 45% tariff on imports from China is “unlikely” and could, if imposed, reduce China's exports to the U.S. by 21% and slice 0.9% off economic growth.

For investors, stocks will tank long before sales of companies are hurt by a trade dust-up, said Jonathan Golub, chief U.S. market strategist at RBC Capital Markets in New York. Whole sectors that are tied to high economic growth will drop, such as industrials, energy and materials companies, not just individual companies with strong ties to China, he said.

“If Trump focuses on protectionist or isolationist policies as opposed to pro-growth policies, don't worry about looking for names that are China-exposed because the market is going to broadly be down,” Golub said.

Steven Madden Ltd., a fashion footwear maker based in Long Island City, New York, sources shoes from manufacturers in countries including China, Mexico and India. Those suppliers could be hurt by higher tariffs in the event of a trade tussle, said CEO Edward Rosenfeld in a Nov. 15 Morgan Stanley conference.

“What I'm hoping is that some of that campaign rhetoric got a little over heated, but that cooler heads will prevail,” Rosenfeld said.

Trump is expected to tone down his stance against China once he's in office and “economic reality” sets in, said Nick Heymann, an analyst with William Blair & Co., who covers General Electric Co., Emerson Electric Co. and Rockwell Automation, among others.

“I've got to believe that there'll be more discussions before clubs start swinging,” he said.

But Trump's lack of a track record in public office means it's a wild card just how much of his campaign rhetoric on trade will be executed. Because he's from outside the establishment he also may be more resistant to lobbying than previous administrations, says Victor Shih, a professor at the University of California at San Diego who studies China's politics and finance.

“He really is outside of this Washington D.C. lobbying establishment,” he said. “One of the big issues going forward is whether they succeed in co-opting him or whether he really will just keep on standing outside of that establishment.”

Bloomberg News

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