So Donald Trump rips up the North American Free Trade Agreement, then agrees to a rebranded U.S.–Mexico–Canada trade deal that consists of little new or innovative trade policy. NAFTA 2.0’s biggest positive impact comes mostly from reducing the economic uncertainty Trump has caused. Trump waits six months to start the ratification process…
…but then on the same day surprise-tweets a new tariff threat against Mexico that could kill his new NAFTA before it takes its first breath:
At 6:30 p.m. (2330 GMT), U.S. President Donald Trump tweeted that Washington would impose a 5% tariff, rapidly ratcheting higher, on all goods coming from Mexico unless the flow of illegal immigrants across the southern U.S. border was stanched.
…Clearly taken aback by the severity and abruptness of the measures, which would take tariffs to 25% by October, [Mexican Deputy Foreign Minister Jesus] Seade swung from advising calm and dialogue to saying a strategy of non-retaliation from President Andres Manuel Lopez Obrador would be unacceptable.
…U.S. Vice President Mike Pence said on Thursday he was pushing to get the U.S. Congress to ratify it this summer, after both Canada and Mexico signaled they were ready.
Hours later, nearly 20 months of talks, concessions, and wrangling to seal the replacement for the North American Free Trade Agreement (NAFTA) seemed to be slipping away.
“This is difficult … even more so between two nations trying to seal a wonderful trade deal. The best trade deal in history according to Trump himself and suddenly he throws this in the way,” Seade said [Noe Torres and Anthony Esposito, “How Trump’s Trade Tariff Put Mexico’s Back to the Wall,” Reuters, 2019.05.31].
Obviously to everyone but Trump, hurting Mexican industries won’t stem immigration. The likely outcome is the opposite, as we can see by the example of NAFTA. Our 1994 deal hurt Mexican agriculture, reduced job opportunities in rural Mexico, and drove more migrants north:
According to Laura Carlsen of the Center for International Policy, as cheap American foodstuffs flooded Mexico’s markets and as U.S. agribusiness moved in, 1.1 million small farmers–and 1.4 million other Mexicans dependent upon the farm sector–were driven out of work between 1993 and 2005. Wages dropped so precipitously that today the income of a farm laborer is one-third that of what it was before NAFTA. As jobs disappeared and wages sank, many of these rural Mexicans emigrated, swelling the ranks of the 12 million illegal immigrants living incognito and competing for low-wage jobs in the United States [John B. Judis, “Trade Secrets,” The New Republic, 2008.04.08].
Now wait—Trump could have a wily plan here: maybe fake-new NAFTA was a ruse all along. Maybe his intent is to provoke Mexico to retaliate, stop buying American corn, reinvigorate its agricultural production system, and restore 2.5 million farm-related jobs in the Mexican versions of South Dakota.
But no—that would require assuming Donald Trump has a sense of actual policy rather than reality-TV drama. Hitting Mexico with tariffs will increase immigration pressure:
Trump’s new policy seems likely to exacerbate the problems that are producing migration in the first place. There are many reasons people around the world flee their countries and head to the United States, but economics is a big one: It’s easier to make money here than in their home countries.
Under those circumstances, Trump’s tariffs make zero sense. The president’s idea is that the policy will work by creating pain in the Mexican economy, forcing that country’s officials to act more aggressively to end migration into the U.S. That pain will take the form of reduced profits and — it seems likely — smaller workforces at Mexican companies.
What will Mexican workers do when they lose their jobs? Probably the same thing as their compatriots from across Latin America: head north.Trump’s new plan might actually increase the number of migrants seeking work in the United States [Joel Mathis, “Why Trump’s New Mexico Tariffs Won’t Work,” The Week, 2019.05.31].
But Trump knows that his non-growing base doesn’t care about what works. They aren’t reading or critically evaluating policy. Like Trump, they just want more myth and the chance to shout along in gleeful hate with Big Brother on their telescreens.
Related Reading: Just before Trump’s latest tariff outburst, China said provoking trade disputes is economic terrorism:
Zhang Hanhui, China’s vice foreign minister told reporters in Beijing China opposed the use of “big sticks” such as trade sanctions, tariffs and protectionism.
“We oppose a trade war but are not afraid of a trade war. This kind of deliberately provoking trade disputes is naked economic terrorism, economic homicide, economic bullying,” Zhang said, when asked about the trade war with the US [“China Tells US Provoking Trade Disputes Is ‘Naked Economic Terrorism’,” UK Guardian, 2019.05.30].
Having the world view the leader of the United States as a terrorist is never good press.
“…reality-TV drama…” This is precisely what struck me as I listened to the self-promoter in chief “tease” his “dramatic” announcement on “the border” yesterday. His behavior and “policy decisions” are all about creating drama. It is all a media promotion, ad time selling approach.
Lawyers, is it legal for Drumpf to prevent asylum seekers from coming into America?
Richard is right. It’s Don the Con at his best. It’s marketing to the dumb conservative bigots. My understanding of the border crossing statistics is they go down in the summer, that’s every summer no matter if tariffs are in place or not. So, Trump does the tariff, the numbers go down during the summer (as they naturally would anyway), then he tells his dumb supporters that he solved the issue. What Trump has learned over a career of such cons is there is a sucker born every day. And they all seem to be conservatives.
Auto companies are saying Wilted Weenie’s latest verbal diarrhea is going to seriously damage their industry because so many factories are in Mexico. Americans buying cars will pay more.
Wilted Weenie does more damage to US economy and citizens.
You nailed that, Richard. Trump uses those TV teases, and the media laps it up, talking about nothing but for that tease for a whole news cycle as everyone speculates about what might happen. Trump can sit and watch the TV news to see how the idea plays, then pick the path he wants. If Trump weren’t such a dangerous maniac focused on pleasing his base and boosting his ratings instead of crafting effective policy for the general welfare, it might actually be a useful crowdsourcing tactic.
Automakers need to throw their cash behind a Presidential candidate who will enact rational, stable trade policy and not create all this unnecessary uncertainty.
On the news this afternoon I heard that the price of some automobiles imported from Mexico would raise as much as $1,300 per vehicle.
Here’s the problem with Trump’s tariffs, when prices go up because of his foolishness, they stay there never to be lowered again.
https://short1.link/EqKGs7
That’s a link to a Steve Sack opinion cartoon about farming and Wilted Weenie’s bailouts. It’s in the paywalled Strib so I don’t know how to make it visible for you.
That link is the cartoon, Debbo. So is this….http://stmedia.stimg.co/ows_155934276338085.jpg?crop=faces&fit=crop&ixjsv=2.2.3&w=640
The great blabbermouth “deal maker” doesnt deserve the status, resources and pulpit the esteemed office of leadership provides. In every example he squanders power and goodwill at the expense of everyday americans, not the 1% and billionaire and corporate tax havened (think GOP’s SD) greedy tax cheats who received his tax cuts. Build infrastructure and charge them for their freight!
IMPEACH THE MTHRFCKR. Carefully. Let’s Dems not hoist ourselfes on our own petard while mcconnell/thune laughs in their millions.
Trump announces a 5% tariff on June 10, and a short time later, the White House followed up with details: The tariff will increase to 10 percent on July 1; 15 percent on Aug. 1; 20 percent on Sept. 1; and 25 percent on Oct. 1.
To which I say, Prices are going up 5% on June 10, 10% on July 1, 15% on Aug. 1, 20% on Sept. 1, 25% on Oct. 1.
Food’s going to be very expensive. And cars. And tractors, televisions, tech equipment and beer.
A very stable genius has never figured out that it’s the consumer who pays the taxes.
trump hates the US allies of World War 2. Our “greatest generation” (fox devotees) owes its very soul to the men and women of Mexico, Canada, the UK, most of the EU, Russia, China and all who fought against fascism and Nazism.
We were not against immigration when the bombs fell on Pearl Harbor. We welcomed the military recruits, the ramped up industrial and mineral support from Mexico as well as their air force 201st Fighter Squadron (Aztec Eagles, who flew combat missions with out US Air force in the liberation of the Philippines and other combat missions. https://www.wearethemighty.com/history/201-escuadron-aztec-eagles-historyHow quickly we forget our friends when we have a criminal elements running the joint. Impeach and deport or imprison these criminals. Give me immigrants any day over this criminal element.
Ah, we soon will long for the days of our clunkers that were traded in…That Obama, got us away from our shade tree days only to fall prey to the electronic micro parts… At least we will have plenty of corn to use with our Mexican recipes. Corn meal for breakfast lunch and dinner…
About time for China to enter the picture for more trade with Mexico. https://larouchepub.com/pr/2019/190311_mexicans_look_to_bri.html
trump plays the losing hand once again, you can tell his expertise in the casino business by the way he plays his cards. Bankrupt and money laundering, what a combination.
Following the $$, where does the tariff paid (ultimately by the american consumer i understand), go? Into some government account?
When does trump get his grubby greedy fingers and snout into that account? Is that the real reason the new tariff gets placed? And to satisfy the pathalogical itch trump has to reach out and hurt someone, getting back for all those hurts he has suffered in life because everyone he deals with eventually sees him for what he is, and treats him thusly.
What a waste of ink.
We shall see him in full display in England as the powerful court jester Republican voters have given the world.
Jerry, there’s a hashtag gathering supporters of fine British citizens who plan to line his route and moon him.
Bwahahahahaha!!!!! 😂🤣😂🤣😂🤣😂🤣😂🤣
👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍
Yikes, he may think of Stormy Daniels and the magazine used on his ample arse.