Trump overlooks the fact that Mexicans living in the U.S. bring in billions of dollars per month to the economy. And now that the World Trade Organization is basically useless, according to Forbes, and the U.S. continues to maintain a large trade deficit with the rest of the world, the Trump Administration thinks it is safe playing with fire.
The U.S. trade deficit with Mexico hit a record-breaking $81.5 billion in 2018, according to U.S. Census trade data. This imbalance puts the U.S. in a powerful position to use tariffs to get policy concessions.
President Lopez Obrador responds
When the president announced yesterday that he is placing a 5 percent tariff on all goods from Mexico, he provoked a strong response from President López Obrador, reports Mexico News Daily. Obrador wrote a letter to his U.S. counterpart that “social problems are not solved with taxes or coercive measures” and instead, proposed dialogue to reach an agreement that is beneficial to both nations.
“How did a country of fraternity for all the migrants in the world become, from night to dawn, a ghetto, a closed space where those who seek . . . to live free from misery are stigmatized, mistreated, persecuted, expelled and [their] right to justice is canceled?” López Obrador wrote. “The Statue of Liberty is not an empty symbol,” he added.
Later in the letter, Obrador wrote: “Specifically, citizen president, I propose to you to deepen dialogue, to seek real alternatives to the immigration problem, and please remember that I do not lack courage, I’m not a coward or a wimp but rather I act on principles.”
White House statement on May 30
In his statement from the White House, Trump wrote: “To address the emergency at the Southern Border, I am invoking the authorities granted to me by the International Emergency Economic Powers Act.”
Trump, in his statement, claims that the U.S. is being “invaded by hundreds of thousands of people coming through Mexico and entering our country illegally.
Trump claims that this massive invasion is having “profound consequences on every aspect of our national life—overwhelming our schools, overcrowding our hospitals, draining our welfare system, and causing untold amounts of crime. Gang members, smugglers, human traffickers, and illegal drugs and narcotics of all kinds are pouring across the Southern Border and directly into our communities.”
“Thousands of innocent lives are taken every year as a result of this lawless chaos. It must stop now!” Our fearless leader loves using exclamation points to show how serious he is, especially when most of what he is saying is “FAKE NEWS.”
The 5 percent tariff will begin on June 10, going to 10 percent on July 1st, 15 percent on August 1st, 20 percent on September 1st, and 25 percent on October 1st if Mexico does not at least stop Central American migrant caravans from traveling to the U.S. border.
“If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the tariffs will be removed,” Trump explained. And if Mexico should choose not to cooperate, “the sustained imposition of tariffs will produce a massive return of jobs back to American cities and towns.”
And of course, Trump had to put in a swipe at the Democrats in Congress, writing they have refused to help in “any way, shape, or form. This is a total dereliction of duty,”{ he added.
A mix of confusion and disbelief
Experts on both sides of the border have warned that Trump’s new plan will be damaging to the economy on both countries and that Mexico could introduce its own retaliatory tariffs, as occurred last year when the United States implemented duties on steel and aluminum.
The tariff threat is at odds with actions being taken recently by the U.S. and Mexico to accelerate the approval process for the U.S. Canada Mexico Agreement in each country’s Congress. While it should be regarded as a separate issue, many people think this is just an added piece of leverage in Trump’s pocket, to use when he wants to push a little harder.
“Mexico is our friend and neighbor, a partner in trade and security,” Glenn Hamer, chief executive of the Arizona Chamber of Commerce and Industry, told the Washington Post. “The president’s announcement is baffling and, if carried out, will be terribly damaging.”
