Last week saw a flurry of tariff skirmishes—both at home and south of the border—following new threats of tariffs against Mexico from President Donald Trump.
On the afternoon of Thursday, May 30, Trump tweeted an ultimatum to Mexico: Stop the flow of illegal immigrants into the U.S., or face growing, across-the-board tariffs on all goods sent to the U.S.
The afternoon pair of tweets read:
“On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,..
“....at which time the Tariffs will be removed. Details from the White House to follow.”
A rough timeline for tariff increases was given in a White House statement posted shortly thereafter. According to the announcement, the tariffs would raise to 10 percent on July 10, 15 percent on Aug. 1, 20 percent on Sept. 1, and 25 percent on Oct. 1.
“Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” the White House statement noted, with no definition of the phrase “substantially stops.” It went on to say that, “Workers who come to our country through the legal admissions process, including those working on farms, ranches, and in other businesses, will be allowed easy passage.”
Mexico is one of the U.S. biggest trading partners. For meat trade, Mexico is our third destination for beef and beef variety meat exports for both volume and value (in 2018), and top export destination for pork variety meat by volume and second for value. Mexico is additionally a source of feeder cattle into the U.S.
In the recent years of tariff fights, Mexico has consistently answered U.S. tariffs with targeted retaliatory tariffs of their own. In an agreement notice from the Mexican Senate on June 5 (translated via Google Translate), the body resolved “to act in reciprocity in case of the threat of imposing 5% or more of tariffs Mexican imports.”
Mexican tariff standoff
Mexico’s president, Andrés Manuel López Obrador, was quick to respond to Trump’s threat in a public letter the same day. Though the letter began with a decidedly conciliatory tone, Obrador asserted that Mexico has been working on the immigration issue in a number of ways and that “social problems cannot be solved with taxes or coercive measures.”
Obrador closed his letter urging a meeting between U.S. and Mexican officials “to seek an agreement that benefits both our nations.” They did just that on Wednesday, June 5.
Vice President Mike Pence and Secretary of State Mike Pompeo met with Mexican Foreign Secretary Marcelo Ebrard at the White House on Wednesday and again on Thursday to negotiate ahead of the June 10 tariff implementation date.
As of press time, there were no official statements made regarding the outcome of the talks, but Trump tweeted that “not nearly enough” progress had been made by Wednesday afternoon, a sentiment Pence echoed in statements to the press on Thursday, June 6.
“At the president’s direction, we welcomed the Mexican delegation to the White House yesterday. We’re grateful that the Mexican delegation came forward with proposals. It was a good discussion. We welcome what Mexican put on the table—but, as the president said yesterday, it’s not nearly enough.”
According to reports from the Associated Press, Mexico offered “small, thus far undisclosed concessions and the U.S. demanded major action” in the talks on Wednesday. AP also reported that Ebrard described the talks as “cordial” and told reporters at the Mexican Embassy that both sides had acknowledged “the current situation cannot keep going” because of the surge in migrant flows.
Domestic tariff fights
The fighting over tariffs was not restricted to negotiations with Mexican officials. In what some mainstream news outlets have characterized as unprecedented intra-party conflict, congressional Republicans voiced public opposition to Trump’s threatened tariffs on Mexico last week.
For example, Iowa’s Senators Chuck Grassley and Joni Ernst, both Republicans, publicly called on Trump not to follow through on his threats of additional tariffs on Mexico.
“Trade policy and border security are separate issues,” wrote Grassley, Senate Finance Committee chairman, in prepared statements on May 30. “This is a misuse of presidential tariff authority and counter to congressional intent.”
Ernst, chairman of the Senate Agriculture Subcommittee on Rural Development and Energy, described the threatened tariffs as putting “the livelihoods of Iowa farmers and producers” at stake.
“While I support the need for comprehensive border security and a permanent fix to illegal immigration, this isn’t the right path forward.”
Both senators noted that the threatened tariffs would additionally jeopardize the U.S.-Mexico-Canada Agreement (USMCA).
“Following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump’s and what could be a big victory for the country,” wrote Grassley, adding that the president should consider alternatives to tariffs.
“The USMCA would provide much-needed certainty to our agriculture community, at a time when they need it,” wrote Ernst. “If the president goes through with this, I’m afraid progress to get this trade agreement across the finish line will be stifled.”
Various mainstream news outlets reported more widespread pushback among congressional Republicans to the new tariff threats. However, most of these reports often referenced a “closed door” meeting on Tuesday, June 4, which WLJ could not verify.
The Associated Press reported: “Republicans in Congress have been threatening a rare confrontation with Trump, warning the White House Tuesday that they are ready to stand up to the president to try to block his tariffs, which they worry would spike U.S. consumer costs, harm the economy and imperil a major pending U.S.-Mexico-Canada trade deal.
“Senate Majority Leader Mitch McConnell said Tuesday with understatement, ‘There is not much support in my conference for tariffs, that’s for sure.’” — Kerry Halladay, WLJ editor