June 3, 2019

Possible Tariffs on Mexican Goods

Editor's note: We couldn’t be more proud of one of our teammates, Isaac Rose-Berman, who penned his first op-ed this week in USA Today: “How college students can bridge American divides: 'Study abroad' in Alabama or New York.” Please give it a read, and share far and wide!

Last week, President Trump announced that “he will apply tariffs of 5% on all Mexican goods on June 10, and increase the rate in coming months to 25% if Mexico does not substantially halt illegal immigration across the U.S.-Mexican border, which is at a decade high this year.” Reuters

“Mexican Economy Minister Graciela Marquez said on Sunday she would meet with U.S. Commerce Secretary Wilbur Ross in Washington on Monday, as the two governments begin holding talks to resolve the issue… Mexican President Andres Manuel Lopez Obrador hinted on Saturday that his government could agree to tighten migration controls to defuse Trump’s threat, and said he expected ‘good results’ from the talks in Washington.”Reuters

See past issues

From the Left

The left is critical of the policy, arguing that tariffs can’t solve the immigration crisis, and that this latest surprise undermines our negotiating power in the global economy.

“It’s worth emphasizing at the outset that it’s an open question as to whether these tariffs will actually be imposed. Trump says they will be, but Trump says a lot of things, only some of which reflect reality in a meaningful way… Complicating matters, it’s an open question as to whether the president even has the legal authority to impose these tariffs… [But let’s] say they’re legal. Will they have the desired effect? Almost certainly not

“Part of the problem is that no one has any idea what the metrics for success might be. In Trump’s tweets, he said he intends to undermine trade between the United States and one of our largest trading partners ‘until the Illegal Immigration problem is remedied.’ But in practical terms, what exactly does that mean? How do officials intend to define ‘remedied’?... For that matter, how does Team Trump intend to define ‘illegal’? U.S. law has an asylum process, which some seeking entry into the country can legally make use of. How is Mexico supposed to ‘stop’... asylum seekers altogether? No one has any idea and the White House has made no effort to explain.”
Steve Benen, MSNBC

It's hard to see what more Mexico could do to appease the Trump administration. In the first three months of this year alone, Mexico arrested 31,000 and deported another 22,000. The country's dealing with a lot of internal corruption that makes enforcement even harder… a lot of the immigration Trump wants stopped isn't coming from Mexico, but through Mexico: Central American refugees fleeing economic crises, political upheaval, and especially drug cartel violence that the Mexican government can't do anything about…

“And if Trump's new tariffs do succeed in inflicting significant economic pain on Mexican businesses, who will bear the brunt of that? Mexico is not exactly known as a labor-friendly place. Many of those newly unemployed workers will likely make their way north, making the job Trump wants to foist on Mexican authorities even harder.”
Jeff Spross, The Week

“Mr. Trump might succeed in pressuring Mexico to take stronger steps on immigration. Tariffs, however, are a very crude tool… Mr. Trump persists in the falsehood that tariffs are paid by America’s trading partners. The truth is that Mexico would no more pay this tariff than it is paying for the construction of a border wall. The evidence is clear: Mr. Trump’s tariffs are taxes being paid by Americans.”
Editorial Board, New York Times

“Trump’s use of tariffs as a pressure tactic isn’t exactly shocking. But that he chose to take this step while trying to get the USMCA passed is somewhat strange… The administration has insisted that the two issues are unrelated. Acting White House Chief of Staff Mick Mulvaney said on a call Thursday that ‘these are not tariffs as part of a trade dispute, these are tariffs as part of an immigration matter, the USMCA is entirely separate.’ But eliminating tariffs and other trade barriers is supposed to be one of the perks of trade agreements, and if Trump keeps going around that by invoking national security concerns, the US becomes a far less attractive trading partner to Mexico, Canada, and just about everyone else.”
Jen Kirby, Vox

“If you are working in a trade ministry in Brussels, Tokyo or Ottawa, how much confidence would you have that any deal you strike with American negotiators will have staying power?... Even if the new tariff is canceled before it is scheduled to begin, the action sends a signal that any cross-border supply chain — for decades a crucial strategy for large multinational firms and quite a few smaller ones — is inherently risky.”
Neil Irwin, New York Times

“A tax increase imposed by sudden executive fiat, in pursuit of an irrational conflict with a neighbor and close ally, counterproductive for the White House’s own declared priorities — this epitomizes the kind of erratic presidential rule the Constitution intended to prevent. We are experiencing the downside of past legislation delegating ‘emergency’ international economic power to the executive branch; Congress must, on a bipartisan basis, take it back.”
Editorial Board, Washington Post

Others argue that “Biden was almost the only one on the stage who talked like a normal person. There was a point near the end of the debate when he was talking about getting men involved in stopping domestic violence and he said that we need to keep ‘punching’ at it… I knew that the twitterati and the analysts would tut tut. Ol’ Joe is just out of touch! He doesn’t know you can’t use words like that. Meanwhile, every non-political junkie watching the debate thought there was nothing wrong with this. Biden was just using ordinary language, not worrying too much if it was fully approved by the woke brigade.”
Kevin Drum, Mother Jones

From the Right

The right is divided, with many arguing that this is an ineffective way to tackle illegal immigration, while some defend it as a strategy worth pursuing.

From the Right

The right is divided, with many arguing that this is an ineffective way to tackle illegal immigration, while some defend it as a strategy worth pursuing.

Critics posit that “Mr. Trump is blaming Mexico for a mess it can’t solve. The real cause of the recent border chaos is the lure of U.S. asylum policy… Mr. Trump is right that Democrats refuse to help, but then why change the subject to Mexico? Our southern neighbor is already helping by agreeing to hold asylum seekers inside Mexico. Perhaps it could better control its border with Guatemala, but the caravans north are often led by gangs that know how to bribe or avoid police. Blaming Mexico is a distraction that lets Democrats off the hook.”
Editorial Board, Wall Street Journal

“I generally support Trump’s goals of controlling our borders, reducing illegal immigration and resetting U.S. trade deals with other countries so that U.S… The trouble with Trump is that he’s pursuing all of them simultaneously with no apparent strategy other than to cause another country pain and force it to negotiate. That strategy is likelier to succeed if he were to pick off one country or issue at a time, focus on that and have allies to back him up…

“If winning the battle with China is a top goal, then other battles with players who can help the United States [should] be put aside. That means dropping current trade fights with Japan and the E.U. to enlist their aid in the standoff with China. It also means not picking a new fight with a potential ally as crucial as Mexico when the USMCA is not yet in force… Without Mexican cooperation on China, Beijing could agree to a trade deal with the United States and then circumvent that by signing a separate deal with Mexico… the administration seems incapable of understanding Strategy 101.”
Henry Olsen, Washington Post

“Ever since Trump’s new trade war with China, he has had to spend more money bailing out angry farmers hurt by his tariffs than he has taken in revenue from the tariffs themselves. So no, tariffs haven’t worked in fixing problems directly related to trade. But then why does Trump think they will be more effective in solving problems unrelated to trade — specifically, the much thornier issue of immigration?”
Editorial Staff, Washington Examiner

“Mexico has played ball with Trump on immigration policy more than anyone would have expected at the outset of his presidency, but there are limits to the Mexican government’s effectiveness and its willingness to subordinate its interests to ours… If Trump’s tariff threat gets Mexico to sign such an agreement, we will be the first to congratulate him on his successful brinkmanship. But it is more likely that Mexico will make some assurances that will be enough to get Trump to relent, while not changing anything fundamental on immigration. The worst-case scenario is getting no action from Mexico whatsoever and the imposition of spiraling, disruptive tariffs, whose costs will in fact fall, to a great extent, on Americans.”
The Editors, National Review

Supporters of the policy, however, argue, “There are no easy solutions to the ongoing border security crisis, but placing a tariff on Mexican goods will at least force Mexico to take responsibility for its role in creating the problem. At times, the Mexican government has taken steps to prevent the flow of illegal immigrants to the U.S. by discouraging migrants from traveling north. Sadly, however, these efforts have been few and far between. A tariff on all imports from Mexico will give our southern neighbor a strong incentive to improve its behavior and start making sincere efforts to help Washington solve the illegal immigration crisis once and for all.”
Steven Rogers, The Daily Caller

“Such bold action against a key trade partner carries risks. But the far greater danger lies in tolerating an unmitigated flow of economic migrants… at a recent rate of over 100,000 per month… It is neither xenophobic nor small-minded for any country to determine the standards and processes to become a legal immigrant. Nor is it in any way compassionate to encourage or tolerate lawlessness along a porous border, which has led to horrific human exploitation, especially within Mexico… If Mexico desires real friendship with the United States, including the benefit of selling into the world’s greatest consumer market, then it must share in the burden of confronting this migrant calamity.”
Steve Cortes, RealClearPolitics

Others note, “I’d hate to be a Democratic member of Congress trying to convince Joe Sixpack that this is a whole new ballgame. The transcript shows Trump being Trump and Ukrainian president Volodymyr Zelensky trying to ingratiate himself with the big dog by, for instance, mentioning that he stays at Trump hotels. Trump’s conversation is typically scattershot, wandering all over the field, leaving a reasonable listener puzzled about what the takeaways are supposed to be…

“I think Joe Sixpack’s response is going to be a hearty shrug. After all that has emerged about Trump so far, his approval rating is closely tracking Obama’s approval at the same point in his presidency. To get Mr. Sixpack’s attention you are going to have to do better than this.”
Kyle Smith, National Review

President Trump should be happy. As much as Warren is articulate, obviously intelligent, and energetically supported by Democrats, she would also be far easier to defeat than Joe Biden… Considering Trump's economy, the president is well placed to defeat Warren.”
Tom Rogan, Washington Examiner

A libertarian's take

“After adding in the ultra-millionaire’s tax and factoring in the other capital taxes Warren wants to levy — on financial transactions, on unrealized capital gains, on corporations — we’d be asking every billionaire to hand over more than two-thirds of their total wealth over a 10-year period. If the government actually managed to collect it, their fortunes would rapidly erode — and so would tax collections. The plan might be a good way to smash wealth, but it’s a terrible way to fund the nation’s health-care system…

“If Warren makes it to the White House, and tries to pass a plan, the Congressional Budget Office will eventually attach more reasonable numbers, with more defensible assumptions, sparking an even more spectacular political blowback than the one that greeted Friday’s announcement. Outside of the progressive Twitterati, there isn’t necessarily an enormous constituency for spending $20.5 trillion to herd every American into a national health insurance program; there would be even less support for spending what Warren’s plan would actually cost.”
Megan McArdle, Washington Post

On the bright side...

8 kids won the 2019 Spelling Bee and people are absolutely baffled.

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