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Trump’s threat to impose tariffs on Mexico could be a disaster. Or it could be a big fat nothingburger

President Donald Trump
REUTERS/Joshua Roberts
Those who deal with President Donald Trump might find him unwilling to fulfill the terms of an agreement. Those who deal with Mexico might find it unable.

In some ways, the entire Trump presidency has been building to this moment. In warning that he’ll impose tariffs on Mexico, the president has managed to unite his biggest policy grievance — immigration — with his preferred weapon — import duties — using his favorite tactic: threats and bluster.

The question is whether this turns into something else that’s common in the Trump era: a medium-sized nothingburger that leaves you with a mild case of indigestion. That would be a win for the high-level delegation Mexico is sending to Washington this week.

If Trump goes ahead, the United States will slap a 5 percent duty on imports from Mexico starting a week from today. It would increase monthly until it reaches 25 percent – or Mexico clamps down on migrant traffic reaching the U.S. border. The fact that no one, except maybe Stephen Miller, saw this coming shows just how wedded we are to the idea that politics ought to make sense.

Some of the risks are pretty obvious:

It would raise prices on a vast array of products in the United States, potentially disrupt supply chains, hurt stocks and dent a strong economy – which happens to be Trump’s strongest argument for reelection.

It makes little sense to threaten Mexico with tariffs at a time when one of your big goals is to push a through a revamped North American free trade agreement. Trump announced his move on the same day President Andres Manuel Lopez Obrador sent the reworked NAFTA agreement to the Mexican Senate for ratification. The White House has been making progress toward a vote at the U.S. Capitol this summer.

It makes it obvious to anyone who’s watching — and everyone is watching — that any trade agreement you’ve negotiated with Trump, like the revamped NAFTA deal, is pretty much worthless. Trump has a major trade dispute going with China, of course, and somewhat lesser ones with Japan and the European Union. Trump is also ending a special trade arrangement with India this week. Why would China rush to close a trade deal with Trump if it concludes he can’t be trusted to stick to it?

Here are a couple of less-obvious issues:

Tariffs would damage the Mexican economy, probably costing some jobs —  which could tempt more Mexicans to try to head north. Trump’s immigration issue at the moment isn’t Mexicans. It’s primarily Central Americans transiting Mexico, so it would be counterproductive if more Mexicans started arriving as well.

Lopez Obrador could to look to Beijing for development assistance. Relations with the United States have been relatively strong for several decades, and NAFTA has been one reason. Mexico has been a manufacturing rival of China, gaining jobs as China becomes more expensive. But a bullying U.S. president feeds longstanding views of the United States across Latin America.

Says former Mexican trade negotiator Antoni Ortiz-Mena: “López Obrador wants an oil refinery, he wants high speed trains in Yucatán, he wants infrastructure investment, he wants a logistics corridor from the Pacific coast to Veracruz. Now, who can do that? … This pushes Mexico right into the arms of China.”

Still, indications are Mexico will try to accommodate Trump. Lopez Obrador says he doesn’t want a trade war and expects “good results” from the meetings starting Wednesday. If Trump is intransigent, Mexico will retaliate. But Mexico isn’t China; it doesn’t have the resources to fight Trump on even terms.

Lopez Obrador speaks of migration in humanitarian terms, but Mexico also realizes it has a problem with the numbers of Central Americans on their way to the United States. It has taken steps to get the matter under control. The number of foreigners detained has doubled compared to a year ago; deportations almost triple what they were in January. Immigration agents and police are patrolling the roads, and motorists face fines if they give migrants a ride. That’s forcing more people to once again consider a ride atop La Bestia, the infamous freight train that heads north to the U.S. border. Mexico also has ended a program offering limited humanitarian visas to those migrating north.

Lopez Obrador also would like to get Trump’s commitment to a “Marshall Plan” for Central America – which probably isn’t going to happen.

Mexico probably will offer to crack down on immigration. The question is how effective it can be. Those who deal with Trump might find him unwilling to fulfill the terms of an agreement. Those who deal with Mexico might find it unable.

The U.S., with all of its resources, is having a hard time managing its southern border. Mexico’s border with Guatemala is long and particularly porous. Lopez Obrador is trying to clean up an extortion scandal in which immigration agents have demanded bribes from those heading north. And Mexican law enforcement has a chronic problem getting a grip on criminal gangs, whether they’re trafficking in drugs or in human beings.

Mexican officials are counting on pressure from U.S. businesses and prominent Republicans to change Trump’s mind. They are aware, in the words of one official, that he “sends out a lot of tweets and many are overruled by another tweet the following day.” They will hope that what they propose is good enough for Trump to declare victory – or at least a pause. A lot is riding on it.

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Comments (3)

  1. Submitted by Joel Stegner on 06/03/2019 - 11:41 am.

    Nothing burger? Please drop the Republican denial speak!

  2. Submitted by David Lundeen on 06/03/2019 - 12:45 pm.

    The art of the deal indeed! Trying to negotiate a trade deal with Mexico, and then additionally imposing separate sanctions shows an elementary ability to connect the dots.

  3. Submitted by Edward Blaise on 06/04/2019 - 11:09 am.

    Reflective of his on going, deep seated, irresistible, psychosomatic, compulsion to stick his finger in everyone’s (EVERYONE’S!) eye. Well, except Putin and Un.

    Let’s stat the countdown to normalcy where we do not have to be assaulted with daily pronouncements from Der Leader.

    Try and imagine the rantings of a lame duck DJT.

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