EDITORIAL: Common ground

Last weekend, President-elect Donald Trump tweeted that he planned to enact steep tariffs in order to punish U.S. companies that move offshore and then try to sell their products back in the United States.

“There will be a tax on our soon-to-be-strong border of 35 percent for these companies,” he wrote in a social media post.

House Majority Leader Kevin McCarthy took issue with Mr. Trump’s plan, however, warning that such an approach could spark a trade war — not to mention hammer consumers with higher costs for certain products. Instead of using tariffs, Rep. McCarthy argues, the United States should rework its tax code and lower corporate tax rates to discourage companies from moving abroad.

“I think that’s a better way of solving the problem than getting into a trade war with a 35 percent tariff,” the California Republican told reporters. “We’ve got to have a level playing field, that companies in America can compete on a level playing field across the world, and right now we do not have one.”

He’s correct. Rather than resorting to protectionist import barriers, Mr. Trump should cooperate with congressional Republicans to pass significant tax relief for both businesses and individuals and to implement other reforms.

Some observers have criticized small-government Republicans for not being more aggressive in their opposition to the president-elect’s tariff rhetoric. But Mr. Trump isn’t even in office yet. And, in fact, Rep. McCarthy didn’t waiver recently when questioned about his economic outlook.

“You want to know my philosophical belief?” he said, “I believe in the free market, I don’t think government should be picking winners or losers.”

Likewise, House Speaker Paul Ryan said he would prefer that Mr. Trump bypass any tariff measures altogether and focus instead on reforming “our terrible” tax code.

“What his concern is, is legitimate — American companies are moving overseas, are shifting headquarters and factories overseas,” Speaker Ryan told the Milwaukee Journal-Sentinel last week. But “we can get at what he’s talking about through smart tax reform.”

Free-market Republicans and Mr. Trump may differ on a handful of items, but they align on plenty of issues, including tax policy, regulatory reform, energy development and job creation. The first order of business for the Trump administration should be to get with Speaker Ryan and Senate Majority Leader Mitch McConnell to hammer out an agenda based on their common ground.