June 10, 2019

US-Mexico Immigration Deal

On Friday, President Trump announced a deal with Mexico regarding immigration. The deal “averted Trump’s threatened imposition of 5% import tariffs on all Mexican goods that had been due to start on Monday unless Mexico committed to do more to help reduce an increase in migrants arriving at the U.S. southern border… The agreement expedites a program known as the Migration Protection Protocols that was announced in December. That program sends migrants seeking asylum in the United States to wait in Mexico while their cases are being processed…

“[Other] key aspects of the agreement are still unclear, including whether Mexico has pledged to buy more U.S. agricultural products and if the deal materially expanded a previous commitment by Mexico to more vigorously police its southern border with Guatemala.” Reuters

See past issues

From the Left

The left is critical of Trump’s negotiating tactics, and argues that this deal will not solve the underlying problems with the immigration system.

“The whole point of trade deals is that they’re supposed to provide some certainty. The USMCA, like NAFTA, amounts to a promise by all three participants that they won’t arbitrarily impose new barriers to cross-border trade. Then Trump went ahead and threatened major new tariffs on Mexico, not because it had violated its trade agreements, but because he didn’t like something that was happening on the border, a situation that has nothing to do with trade policy. So the USMCA appears, in practice, to be a solemn promise by the U.S. government not to impose tariffs on Mexican products … unless it feels like it. If that’s what you get out of making a deal with America, why bother?… events like the Mexican standoff weaken America’s position in the world.”
Paul Krugman, New York Times

The incident “cracked open fissures among Republicans, with business groups and GOP senators angrily lobbying the White House to persuade the president to back down… The brouhaha also exposed the diminishing effectiveness of the president’s negotiating style, if only because of its growing predictability, which is signaling to those across the table that neither he — nor his threats — can be taken seriously. It was eerily reminiscent of the president’s threat in late March to close the U.S. southern border if Mexico didn’t stop the flow of undocumented immigrants and illegal drugs into the United States — only to back down six days later and issue Mexico a ‘one-year warning’ instead.”
Eliana Johnson and Nancy Cook, Politico

“Nine days in spring offered a case study in Mr. Trump’s approach to some of the most daunting issues confronting him and the nation: When the goal seems frustratingly out of reach through traditional means, threaten drastic action, set a deadline, demand concessions, cut a deal — real or imagined — avert the dire outcome and declare victory. If nothing else, he forces attention on the issue at hand. Whether the approach yields sustainable results seems less certain

“Even after the deal was struck on Friday night, the Business Roundtable issued a statement essentially asking Mr. Trump not to do it again, describing itself as ‘deeply concerned about the threat or imposition of tariffs to press policy changes with our neighbors and allies.’ Business, after all, likes certitude, predictability. So does Washington.”
Peter Baker, New York Times

“Mexico did not cause the surge of immigrants from Central America to the United States, and it is not well positioned to solve the problem. Better tools are at hand for the U.S. president and Congress, if they would only decide to wield them

“A concatenation of court rulings, congressional inaction and administration failures has created a perverse incentive for migrants to cross the border with children. They claim asylum; a swamped court system postpones their case for years; the government does not have the facilities or the legal right to hold them; so they are ‘paroled’ into the United States for an extended period. Most of the asylum claims eventually are denied… Congress should approve funding to hire more judges and to hold families in decent conditions for short periods. The more durable fix would be to allow for the legal flow of immigrants that the economy needs, including legal status for ‘dreamers’.”
Editorial Board, Washington Post

“Beijing is [also] looking to a seemingly unlikely place for support: Europe. In recent days, Chinese ambassadors across the continent have gone on the offensive to rally Europe behind Hong Kong’s government and against the protestors. As part of their campaign to promote Beijing’s line, China’s ambassadors are publishing op-eds in local papers and publicly criticizing European leaders for failing to denounce what they are trying to frame as violent protests…

“While Washington has been antagonistic, Beijing has been careful to strike all the right chords… [But] to uphold their shared values, both the United States and Europe need to collectively push back against China’s unfair trade and investment practices, its blatant human rights abuses, and the anti-democratic norms and practices it seeks to spread… Europe must realize where its long-term interests lie, and not let [the Trump] administration or the allure of economic gains prevent the right choice. The health of liberal democracy will depend on it.”
Andrea Kendall-Taylor and Rachel Rizzo, Politico

Regarding the Cadillac tax, “high-premium employer-based plans raise the cost of health care for everyone by encouraging the overconsumption of expensive services. This means that even Medicare and Medicaid face higher prices. Quite aside from its benefits for the health-care market, the Cadillac tax would also have the effect of expanding the tax base and making the tax code more efficient. It would raise revenues by about $15 billion a year… Rather than killing or delaying the Cadillac tax, Democrats should be trying to make it operational. The tax would raise revenue, lower costs, increase the efficiency of the tax code and give the Obamacare individual market its best chance at success.”
Karl W. Smith, Bloomberg

“The two issues with which he is most often associated, support for a balanced budget and opposition to free trade, put him at odds with both of our major political parties. An old-fashioned, soft-spoken Southerner, he nevertheless held views on so-called ‘social issues’ that would be to the left of the mainstream of the Republican Party, both then and now. He was a fervent supporter of the Vietnam POW/MIA movement in the late '80s and early '90s, but he was not in any sense a hawk. Never mind 2003. Perot opposed the first war in Iraq in 1990… Perot's death should be mourned by all Americans who regret the fact that it is no longer possible to make reasoned, non-ideological arguments about questions of public import, and by the devolution of our political life into mindless partisan squabbling.”
Matthew Walther, The Week

From the Right

The right celebrates the deal as a victory for Trump, but argues that the immigration system must still be fixed by Congress.

From the Right

The right celebrates the deal as a victory for Trump, but argues that the immigration system must still be fixed by Congress.

“Trump went about his business and did what other politicians refused to do. He found a promising way to decrease illegal immigration… Mexico has a vulnerable economy and the U.S. economy is far, far stronger. Mexico had and still does have more to lose and so it made a deal. Leveraging your superior bargaining power is part of the art of the deal.”
Tom Del Beccaro, Fox News

The President of the National Border Patrol Council writes, “The historic agreement will end the magnet known as catch-and-release. It will free up valuable Border Patrol resources. It will save American taxpayers billions of dollars that otherwise would have been used to fund the many social programs, medical care, housing, education and incarceration (among other things) for illegal immigrants in the United States. If Mexico follows through on this agreement, the Border Patrol will finally stop being a quasi-social services agency. We will once again become a law enforcement agency. This will allow us to properly focus on the criminal elements and dangerous drugs that flow across our borders.”
Brandon Judd, Fox News

Trump “played high-stakes poker and won a round on border security… [Voters] are a pretty smart bunch. Assume for a moment that they know, generally, that tariffs are a lousy idea in terms of economic growth. Assume as well that they know that tariffs can be an instrument of national power in confrontations unrelated to economic growth…

“Assume that voters know our competition with China is far more than an economic race, but rather a complex geopolitical rivalry that both sides wish to keep contained short of open conflict and that is waged through proxies, cyber-confrontations, intellectual-property battles, freedom-of-the-seas disputes and the relative size and power of our armed forces and those of our allies. In that context, tariffs on Chinese goods are just part of an overall negotiation toward a new normal that is in everyone’s interest. So ‘tariffs bad, free trade good’ is simplistic. ‘Free trade is good and agreed-upon international conventions are required for genuinely free trade and tariffs may be necessary to achieve those conventions’ is accurate. And widely understood.”
Hugh Hewitt, Washington Post

Critics, however, argue, “These changes may reduce the migrant wave from Central America, which reached as many as 1,500 people a day in late May. But the underlying incentive of lax U.S. asylum law will still attract migrants whether or not they have to stay for a time in Mexico. Fixing that loophole is Congress’s job, but Democrats refuse to act. Yet by focusing so much on Mexico as the cause of the border mess, and now declaring diplomatic victory, Mr. Trump is taking the political pressure off Democrats to act on immigration…

“The use of tariffs to achieve non-trade goals is bad policy that won’t stop with immigration… Now that Mr. Trump is using tariffs as an all-purpose weapon, look for others to play the same game. Joe Biden’s climate proposal, released last week, suggests using tariffs against countries that don’t do what he wants on climate change. The danger is that future Presidents will also view tariffs as a diplomatic remedy for whatever ails them. Congress would do well to take back the ‘emergency’ and ‘national security’ blank checks on trade that it has given Presidents over the decades.”
Editorial Board, Wall Street Journal

Regarding the decision to label China a currency manipulator, “traders may fear the tiny devaluation signals trade conflict spreading to currency. [But] this is highly unlikely, because a steep devaluation would be destabilizing for China… If an extended depreciation is encouraged or permitted, RMB holders can only guess what level the government truly wants. Last time around — four years ago — they chose large-scale capital flight rather than trusting the People’s Bank. China’s economy is slower, older, and more indebted than back then. Most importantly, it no longer has the foreign exchange to afford a repeat of 2015–6. That’s why the People’s Bank is likely to continue to defend the RMB near 7 to the dollar.”
Derek M. Scissors, The National Interest

“Trump should be overjoyed. Tariffs are taxes paid by Americans on the things Americans buy. The only way China can be paying any of them is if something else, something extra, then happens — like the yuan dropping. This makes all imports into China more expensive for Chinese citizens. That's China paying for Trump's tariffs when the yuan falls. Without this happening, only Americans pay. With the yuan dropping, China pays as well. This is the claim Trump has been making all along, that China's really paying those trade taxes — now they are… Imposing significant export tariffs on a country should mean the value of that currency falls. This is what is happening. Why is Trump complaining about it?
Tim Worstall, Washington Examiner

“NBC and MSNBC embraced Sen. Elizabeth Warren of Massachusetts in the first debate of Democratic presidential candidates Wednesday night, treating her like the star of the show. The debate led off with Warren, who had a huge popularity advantage from the start… NBC anchor Savannah Guthrie started it off sounding more like Warren’s press secretary. ‘You have many plans – free college, free child care, government health care, cancelation of student debt, new taxes, new regulations, the breakup of major corporations,’ Guthrie said, before teeing up an economy question. Guthrie even used Warren’s plan to break up tech companies as the foundation for a question for Sen. Cory Booker of New Jersey… the round-robin final comments also ended with Warren, as Maddow asked her for the ‘final, final statement.’ That let NBC bookend the entire debate with Warren and Warren.”
Dan Gainor, Fox News

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

Outside Hong Kong, the silence Is deafening… Some protesters in Hong Kong today are adopting the British Union Jack flag, the American flag and the ‘Star-Spangled Banner’ as symbols, yet that doesn’t seem to have stirred our collective imaginations… Americans are preoccupied with fighting each other over political correctness, gun violence, Trump and the Democratic candidates for president. To be sure, those issues deserve plenty of attention. But they are soaking up far too much emotional energy, distracting attention from the all-important struggles for liberty around the world…

“It’s 2019, and the land of the American Revolution, a country whose presidents gave stirring speeches about liberty and freedom in Berlin during the Cold War, remains in a complacent slumber. It really is time to Make America Great Again — if only we could remember what that means.”
Tyler Cowen, Bloomberg

On the bright side...

California restaurant offers free pizza to diners who lock away their phones.

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