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Tariff Temper Tantrum: Trump “Created a Fake Crisis & Has Announced a Fake Solution” with Mexico

Facing an escalating showdown with Mexico and an insurrection from his own party, President Trump said Friday the United States had reached a deal with Mexico to avert a 5% tariff on all imported Mexican goods that was due to take effect today and increase to 25% by October. Trump’s announcement came after three days of Mexico-U.S. negotiations in Washington. Officials said it was based around Mexico’s commitment to deploy National Guard forces throughout the country, in particular to its southern border, in order to stem the flow of northbound migrants headed toward the US. Under the deal, they said Mexico also agreed to expand what is known as the Remain in Mexico policy, which allows the U.S. to send back Central American asylum-seeking migrants to Mexico while their cases make their way through immigration courts. However, on Saturday, The New York Times reported that the plan to send troops to the border had already been agreed to in March. We speak with Lori Wallach, director of Public Citizen’s Global Trade Watch and author of “The Rise and Fall of Fast Track Trade Authority.”

Trump Militarizes Mexico

In return for having the tariff “indefinitely suspended,” Mexico has agreed to militarize the country using Mr. López Obrador’s newly created National Guard, which is under military command. The effort will start at the southern border, though where it will end is anybody’s guess.

Mr. Trump has claimed victory in his tariff gambit. But it’s unclear how effective the promised troops will be at stopping migrants. The main causes of the crisis are liberal U.S. laws and procedures for claiming asylum, which attract migrants from Central America and other places. Congress has refused to pass reform. But markets work, as more than a half-century of a failed war on drugs proves, and the wild Guatemalan border will not be easily sealed.

.. Meanwhile, AMLO, as the Mexican president is popularly known, also won, though insidiously. The career politician with an authoritarian bent is a backer of Venezuelan dictator Nicolás Maduro. Since taking office in December, he has been cozying up to the military. Now he pockets more power, and with the blessing of Washington. This is a setback for the rule of law.

President López Obrador initially had very high approval ratings. But they began falling when Mexico’s economy slumped in the first quarter, and his attacks on the press alienated even some of his most ideologically sympathetic constituents. Mexicans who were worried about the strongman instincts of their socialist president gained hope that the slowdown would force him to exercise greater restraint.

Then came Mr. Trump’s May 30 threat, and Mexicans rallied behind their president. A poll by the Mexican daily El Financiero last week found that “84% of Mexicans believe that, faced with pressure” from Mr. Trump, “the country should remain united and support” AMLO.

Mr. López Obrador knows how to play politics. In the earliest months of his presidency he encouraged the migrants before taking a more practical stance. In the face of standard Trump hyperbole about Mexico, he calmly sent a delegation to Washington to negotiate. His base is praising the deal, though had it been sealed by an AMLO opponent they would have vigorously denounced it. His opposition is happy because free trade is saved.

An AMLO rally Saturday in Tijuana was originally billed as “an act of unity to defend the dignity of Mexico and in favor of the friendship with the people of the United States.” After the two sides came to agreement, it was changed to a “celebration” of the deal—and of the new life that Mr. Trump breathed into AMLO’s presidency.

.. Blowing up the North American economy to solve the migration crisis never made sense. Before the North American Free Trade Agreement, the average tariff for Mexican goods entering the U.S. was only 4%. Twenty-five years later, North America is a highly integrated productive colossus that depends for its efficiency on seamless cross-border supply networks.

Senate Republicans Warn White House Against Mexico Tariffs

Republican senators sent the White House a sharp message on Tuesday, warning that they were almost uniformly opposed to President Trump’s plans to impose tariffs on Mexican imports, just hours after the president said lawmakers would be “foolish” to try to stop him.

Mr. Trump’s latest threat to impose 5 percent tariffs on all goods imported from Mexico, rising to as high as 25 percent until the Mexican government stems the flow of migrants, has prompted some of the most serious defiance in the Republican ranks since the president took office.

Republican senators emerged from a closed-door lunch at the Capitol angered by the briefing they received from a deputy White House counsel and an assistant attorney general on the legal basis for Mr. Trump to impose new tariffs by declaring a national emergency at the southern border.

“I want you to take a message back” to the White House, Senator Ted Cruz, Republican of Texas, told the lawyers, according to people familiar with the meeting. Mr. Cruz warned that “you didn’t hear a single yes” from the Republican conference. He called the proposed tariffs a $30 billion tax increase on Texans.

“I will yield to nobody in passion and seriousness and commitment for securing the border,” Mr. Cruz later told reporters. “But there’s no reason for Texas farmers and ranchers and manufacturers and small businesses to pay the price of massive new taxes.”

The president’s latest foray into a global trade war has troubled economists and roiled stock and bond markets. The Federal Reserve chairman, Jerome H. Powell, hinted on Tuesday that the central bank could cut interest rates if the trade war started to hurt the economy. The remarks sent stocks higher for their strongest day in months.

But senators were mindful of the long-term stakes for their home states.

Texas would be hit the hardest by the proposed tariffs on Mexican products, followed by Michigan, California, Illinois and Ohio, according to the U.S. Chamber of Commerce. A 25 percent tariff would threaten $26.75 billion of Texas imports.

“We’re holding a gun to our own heads,” said Senator John Cornyn, Republican of Texas.

If Mr. Trump were to declare an emergency to impose the tariffs, the House and the Senate could pass a resolution disapproving them. But such a resolution would almost certainly face a presidential veto, meaning that both the House and the Senate would have to muster two-thirds majorities to beat Mr. Trump.

Senator Ron Johnson, Republican of Wisconsin, said he warned the lawyers that the Senate could muster an overwhelming majority to beat back the tariffs, even if Mr. Trump were to veto a resolution disapproving them. Republicans may be broadly supportive of Mr. Trump’s push to build a wall and secure the border, he said, but they oppose tying immigration policy to the imposition of tariffs on Mexico.

“The White House should be concerned about what that vote would result in, because Republicans really don’t like taxing American consumers and businesses,” Mr. Johnson said.

Mr. Trump, just hours before at a news conference in London with the British prime minister, Theresa May, said he planned to move forward with imposing tariffs on Mexican imports next week as part of his effort to stem the flow of migrants crossing the southern border.

“I think it’s more likely that the tariffs go on, and we’ll probably be talking during the time that the tariffs are on, and they’re going to be paid,” Mr. Trump said. When asked about Senate Republicans discussing ways to block the tariffs, Mr. Trump said, “I don’t think they will do that.”

He said, “I think if they do, it’s foolish.”

Republicans are still holding out hope that the tariffs can be avoided. Mexico’s foreign minister is leading a delegation to Washington this week to try to defuse the situation with the Trump administration. A White House meeting with Vice President Mike Pence and Secretary of State Mike Pompeo on Wednesday could prove pivotal.

“There is not much support for tariffs in my conference, that’s for sure,” said Senator Mitch McConnell of Kentucky, the majority leader. “Our hope is that the tariffs will be avoided, and we will not have to answer any hypotheticals.”

Leaving the lunch, lawmakers complained they were facing too many such hypotheticals. Senator Rob Portman, Republican of Ohio, asked the lawyers what the precedent for imposing tariffs through an emergency declaration would be. His question was left unanswered. In fact, since the National Emergencies Act was signed in 1976, it has never been used to impose tariffs on a single country.

Senator Mitt Romney, Republican of Utah, said he “would not be inclined to vote on a tariff against a friend,” but ventured that “what you’re likely to see is the Mexican government and our government finding some way to work on this collaboratively and not reach a tariff.”

Others were less convinced.

“He’s committed to this,” said Senator John Kennedy, Republican of Louisiana, who spoke with Mr. Trump on Sunday and was sure the president would proceed with the tariffs, regardless of the concerns. “He’s serious as four heart attacks and a stroke. He’s moving forward.”

Opponents of the tariffs would use the same motion of disapproval that they tried to use to block the president from grabbing federal money for a border wall that was not appropriated for that purpose. That motion did pass Congress with significant Republican support, but not enough to overcome Mr. Trump’s veto.

Mr. Johnson warned White House officials that they should not count on a veto override vote going the same way. But Mr. Trump has supporters, and Republicans, especially in the House, have been loath to oppose him on immigration. Senator Marco Rubio of Florida, once a moderate on immigration policy, took to Twitter to say the president was within his rights to use tariffs to force Mexico’s hand.

Senator Kevin Cramer, Republican of North Dakota, expressed support for the president, as did Senator Thom Tillis of North Carolina, who is up for re-election in 2020 and faced blistering criticism after flip-flopping this year on whether he would vote to disapprove the president’s emergency declaration to build the wall.

“I think Mexico could help us solve the crisis down at the border,” Mr. Tillis told reporters. “What’s the tax on handling 80,000 additional illegal immigrants coming across the border, housing them, adjudicating them? You’ve got to look at the total cost of the prices.”

If a revolt comes to pass, it would start in the Senate, but House Republicans would have to join the effort to overturn a veto.

Representative Hakeem Jeffries of New York, the chairman of the House Democratic caucus, declined to forecast whether the House would try to block the tariffs on Mexico.

“The administration’s tariff policy is erratic and all over the place,” he said. “We will see what the Senate Republicans ultimately decide to do, but we will certainly strongly consider proceeding in a way that is appropriate and consistent with our legislative powers.”

Mr. Trump seemed unimpressed when a reporter noted that Mexican officials said that they had increased the number of migrants they had apprehended coming into their country from elsewhere in Central America. He offered no specifics on what it would take to keep the tariffs from being imposed.

“Look, millions of people are flowing through Mexico,” Mr. Trump said. “That’s unacceptable.”

Senate Republicans Weigh Moves to Block Trump on Mexico Tariffs

Trump defends plan as needed to address migrants from Central America, says lawmakers would be making a mistake if they try to stop him

Democrats have roundly opposed Mr. Trump’s border stance and his plan to impose tariffs on Mexico. But his announcement triggered blowback from some Senate Republicans as well, who returned this week from a Memorial Day recess ready to consider their options to stop him.

Republican senators will meet behind closed doors Tuesday for a weekly lunch, where the subject is expected to be at the top of the agenda. A White House deputy counsel is expected to attend to discuss the matter.

“If [White House officials] continue down this path and they escalated the tariff, I suspect Congress is going to want to probably be heard from, for sure,” Senate Majority Whip John Thune (R., S.D.) said on Monday night. He said that Republicans were still in the process of studying the legal authority on which the administration would rely to impose the tariffs.

In comments at a press conference in London alongside U.K. Prime Minister Theresa May, Mr. Trump brushed off Republican senators’ concerns, calling any move to block him a mistake.

“I don’t think they will do that—if they do, it’s foolish,” Mr. Trump said, when asked what he thought of potential Republican efforts to block his Mexico tariffs. On the state of the talks with Mexico, he said: “We are going to see if we can do something, but I think it’s more likely that the tariffs go on.”

One issue is whether the national emergency Mr. Trump declared earlier this year to divert funds to Mexico border-wall construction also gives him the power to impose tariffs. Some Republicans suspect he sees that declaration as providing the legal basis to impose ever-increasing tariffs as a mechanism to pressure Mexico to stem the flow of migrants. The White House hasn’t publicly cited its legal basis for the tariffs plan.

At a meeting with Senate Republican aides on Monday, one White House counsel indicated that the president intended to rely on a statute called the International Emergency Economic Powers Act to impose the tariffs, which is triggered by an emergency declaration. Some Senate GOP aides expect Mr. Trump to declare a new emergency or amend his existing declaration in order to put the tariffs into place.

Republican aides say such a move could prompt a vote to end the tariffs. The vote could be initiated in either the Senate or the House. It is unclear which chamber would vote first, although beginning with a Senate vote might provide political cover to House Republicans who are generally reluctant to challenge Mr. Trump.

A vote to terminate the tariffs is seen as the fastest route to block the president, since such a measure is protected against stalling tactics. Congress used a similar approach earlier this year when it voted to reject Mr. Trump’s national emergency declaration.

But Mr. Trump vetoed that measure, and Congress didn’t muster enough votes to override the veto, meaning the national emergency stayed in place.

Congress could also amend the International Emergency Economic Powers Act to make clear that it can’t be used to impose tariffs. The law is typically used to freeze assets and has never before been used in the way that the president contemplates, creating potential legal problems for the administration.

“This is certainly breaking new ground, and that creates both a legal problem potentially if there are court challenges, and it’s also clear from the way Republicans are responding that some of them just don’t like this idea,” said Chris Edelson, an American University government professor who wrote a book on emergency presidential power.

House Democratic leaders have been critical of Mr. Trump’s decision to impose tariffs, but said they were waiting to see how Senate Republicans respond.

“The problem that we confront in this country is that the president often conducts himself in an erratic fashion as it relates to economic policy, particularly in terms of his deployment of tariffs,” Rep. Hakeem Jeffries of New York, chairman of the House Democratic caucus, said Tuesday.