Tariff Man: First Blood
In this episode, Andrew and the Trade Guys discuss the U.S.-Mexico deal saga and its impact on the USMCA. (“RocketMan” rendition by Mallory Heights.)
What We’re Reading
“Trump lashes out after his Mexico deal gets poor reviews”
“President Donald Trump intensified his defense of the widely panned agreement his administration struck with Mexico, even calling into a cable news show for nearly half an hour Monday to try to sell the deal as a victory.”
“After a weekend during which he railed against news reports poking holes in his claims — some of which are so far unsubstantiated — that Mexico had agreed to significant new concessions on immigration enforcement to avert tariffs, the president took to the airwaves to argue his case.”
“Apparently responding to an earlier interview on CNBC’s ‘Squawk Box’ during which Myron Brilliant, head of international affairs at the Chamber of Commerce, decried Trump’s ‘weaponization of tariffs,’ the president called in to fight back.”
Why it matters: The combination of suspicion that the president failed to get Mexico to commit to new immigration measures and massive business backlash to last week’s tariff threat calls into serious question the wisdom – and point – of the latest trade episode with Mexico. Trump and the Chamber of Commerce also exchanged barbs over the administration’s use of tariffs.
Key questions: What did each side agree to? Was the threat of tariffs necessary to get a deal? Why has there been so much backlash against the deal and the president’s tariff threat? Is it significant that the Chamber of Commerce is bashing the president when historically the Chamber has supported Republicans in office?
“Trump threatens more tariffs on Mexico over part of immigration deal”
Reuters
“President Donald Trump on Monday hinted more details were to come about a migration pact the United States signed with Mexico last week, saying another portion of the deal with Mexico would need to be ratified by Mexican lawmakers.”
“He did not provide details but threatened tariffs if Mexico’s Congress did not approve the plan.”
“’We have fully signed and documented another very important part of the Immigration and Security deal with Mexico, one that the U.S. has been asking about getting for many years. It will be revealed in the not too distant future and will need a vote by Mexico’s legislative body,’ Trump tweeted.”
Why it matters: Mexico has not entirely escaped the threat of U.S. tariffs. The president, as well as Treasury Secretary Steven Mnuchin, have warned that failure on Mexico’s part to follow through with the deal to stem the flow of undocumented immigrants will be met with tariffs.
Key questions: Are there clear metrics for what Mexico must do to satisfy the president? What are the chances that the administration revives its tariff threat in a few weeks or months?
“‘Tariffs are a beautiful thing’ — Trump doubles down on trade war strategy with China after Mexico deal”
“President Donald Trump, energized by the new border deal with Mexico, made it clear Monday that tariffs are a key weapon in his arsenal as he moves forward with trade talks with China and other countries.”
“’People haven’t used tariffs, but tariffs are a beautiful thing when you are the piggy bank, when you have all the money. Everyone is trying to get our money,’ Trump said during a telephone interview with CNBC’s ‘Squawk Box.‘”
“Trump said his threat to impose tariffs on Mexico encouraged the country to agree to stronger immigration enforcement, and he predicted the strategy will be successful with China. The president again argued that tariffs will push companies to move jobs to the U.S.”
Why it matters: The latest episode with Mexico seems to have reinforced the president’s view that tariffs are an effective source of leverage in diplomatic disputes.
Key question: Does the latest tiff with Mexico validate the president’s tariff-first approach?