Yesterday, Carlos Tejada reported in the NY Times that Trump "threatened to hit Mexico with new tariffs, escalating his immigration fight with America’s largest trading partner. And with that, he showed, once again, that he’s ready to employ trade as an all-purpose tool for his policy goals... Trump is juggling multiple trade conflicts today, with allies and rivals alike. His demands, often first disclosed through Twitter, have caught trading partners off guard. Of course, Mexico isn’t Mr. Trump’s only target. Far from it. In fact, what he’s taking on is broader than any particular country. He is challenging the post-World War II consensus that free trade enriches the world."In 2018, the U.S. imported $346,527,700,000 worth of goods from Mexico and exported $265,014,400,000 worth of goods to Mexico. So far this year, trade between the two countries has been even bigger. According to CNBC three states will he hit hardest: Arizona, Michigan and Texas.
If Trump goes through with the duties, their effects will ripple across the country. America imported $346.5 billion in goods from Mexico last year, 10% more than in the prior year, according to the Office of the U.S. Trade Representative. But several key 2020 electoral states would take a particularly sharp blow from the tariffs.Border state Arizona gets about 40% of its imports from Mexico, the highest share for any state. About 38% of Michigan’s imported products come from Mexico, while about 35% of Texas’ imports are from its southern neighbor.
Other states which important a significant amount of goods from Mexico include California, Illinois, Georgia, Florida, Ohio, North Carolina and Tennessee. U.S. imports from Mexico include computer and electronics equipment, auto parts, chemicals, petroleum, appliances, paper food products... CNBC suggests that if Trump’s surprise tariffs on Mexican goods raise costs for companies and consumers in those three states enough, there will be political costs to pay. Trump isn't likely to lose Texas or win Michigan, but Arizona-- with its 11 electoral votes-- could flip blue. Worse for the Republican Party is the list of Republicans up for reelection next year who could be negatively impacted, including Senators John Cornyn (R-TX) and Martha McSally (R-AZ) and Reps Will Hurd (R-TX), Chip Roy (R-TX), Kenny Marchant (R-TX), John Carter (R-TX), Pete Olson (R-TX), Dan Crenshaw (R-TX), Fred Upton (R-MI), Tim Walberg (R-MI), Devin Nunes (R-CA) and Duncan Hunter (R-CA).Michael Bloomberg wrote a widely-read editorial for Bloomberg News yesterday, Stop Trump on Trade, suggesting that Congress rein in the idiot's "trade-policy powers before it's too late. Trump’s approach to trade policy had set new benchmarks of incoherence and irresponsibility even before his threat to impose escalating tariffs on imports from Mexico-- but this latest maneuver takes the cake. The administration plans to harm businesses north and south of the border, and to impose additional new taxes on U.S. consumers, not to remedy a real or imagined trade grievance but to force Mexico to curb migration to the U.S. This is a radical and disturbing development. The administration is invoking a law that allows it to impose emergency economic sanctions. It’s safe to say that Congress never envisaged that those powers would be used in a case like this."A day earlier, one of his reporters, David Fickling, has asked "How far down the rabbit hole are we on U.S. trade policy right now? Just a few years ago, the idea that British cars and Canadian steel could be considered a national-security threat to America would have been laughed out of the room-- but here we are, with so-called Section 232 tariffs still threatened on European automobiles and only just removed on Canadian metal."You can't say he didn't warn usBloomberg himself noted that "Republican Senator Chuck Grassley, who has supported many of Trump's previous moves on immigration, said it plainly: 'This is a misuse of presidential tariff authority and counter to congressional intent.' It’s also, by the way, a straightforward violation of U.S. commitments under existing trade treaties. In effect, even the pretense that the U.S. is adhering to a legitimate, rule-bound trade policy has been all but abandoned." This is another instance of Putin just laying back and savoring how far his modest investment in the U.S. elections has gone to further Russia's foreign policy objectives.
And the message it sends to Canada, China, the European Union and other U.S. trading partners is wholly counterproductive. Negotiations on the deal Trump proposed as a successor to Nafta have only recently concluded; his earlier tariffs on Mexican steel were lifted just days ago. This new threat has nothing to do with those matters, U.S. officials explained: It’s about immigration, not trade. What are other governments to make of such a claim? They’re bound to wonder why they should ever enter into good-faith commitments with such an erratic and unreliable administration.The Constitution makes Congress chiefly responsible for trade policy. Various laws have delegated power to the executive branch over the years-- but conditionally, on the understanding that presidents would use it to protect national security and promote rule-based commerce, not dismantle the global trading system. This power is being systematically abused, and Congress should move to take it back.Republicans who claim to stand for free trade-- a longstanding party principle-- have lacked the courage of their convictions. And those who complained bitterly about presidential overreach by Barack Obama have been awfully quiet about this president’s flagrant abuse of executive authority. They should stop quivering and start legislating.The problems at the border are real-- but they’re partly this administration’s fault. More than two years after taking office, Trump has failed to adapt to a change in immigration flows from single Mexican males seeking work to Central American families and unaccompanied minors seeking refuge. He has resorted to draconian methods that have only brought more misery to the most vulnerable while failing to remedy the situation.A better approach would be to work with Mexico to strengthen its southern border. Instead of cutting off aid to Central America, as Trump plans to do, the U.S. should provide more, and help El Salvador, Guatemala and Honduras defeat the gangs that smuggle migrants north. It also needs to spend more on its overstretched asylum and immigration court systems, and on Border Patrol facilities, so that applicants can be processed as speedily, humanely and fairly as possible.But more is at stake here than control of the border. From the start, Trump’s failure to understand that trade is a matter of mutual advantage, combined with his contempt for international rules and norms, has threatened the global economic order that the U.S. designed and built. This latest decision suggests that Trump’s willingness to gamble with the country’s prosperity, and that of one-time friends and allies, is greater than previously supposed.The prospects for global trade and output were already uncertain. Now, Trump is risking not just a slow and steady reduction in investment thanks to heightened anxiety over trade, but a sudden collapse in confidence that could roil financial markets and bring on an outright recession. It’s increasingly urgent that Congress curb this president’s ability to conduct a potentially ruinous trade policy.