In a surprise announcement that could derail a major trade deal, President* Donald Trump announced Thursday that he is slapping a 5% tariff on all Mexican imports, effective June 10, to pressure the country to do more to crack down on the surge of Central American migrants trying to cross the U.S. border.This smacks of something dreamed up by both the World's Oldest Toddler and his Office Nazi.
He said the percentage will gradually increase — up to 25% — “until the Illegal Immigration problem is remedied.”
As many articles have pointed out, one of the things Trump is proudest of is ripping up NAFTA and replacing it with his version. That agreement has not been ratified by either the Mexicans or the U.S. Senate. And now, there's a better chance that it won't be.
Tariffs are a form of economic warfare. Using them against a friendly nation strikes me as being a not-terribly bright idea.
Using them against Mexico is not at all smart. I believe that internal Mexican politics will not look favorably on a government that is seen to be bending a knee to the Colossus of the North. I would not be at all surprised if there was talk in Mexico of allowing migrants to ride in boxcars (instead of on top of them) from the central Mexican railheads to the border.
It can get much worse. The Central American nations could implement a policy of "we don't accept anyone being deported from the US." The could claim that any papers are forged, that any admissions of citizenship in the origin country was obtained by psychological torture.
From there, they could make it legal to manufacture cocaine, crack, and Schedule 1 drugs for exportation-only. Legalization of production might have the side-effect of reducing the amount of crime and violence associated with the production of such drugs.
Another step would be to invite the PLAN to make a port visit.
Trump may think that he's the only person on the global stage who is willing to play hardball. He may find out that he is grievously in error.
To All,
ReplyDeleteBreath in breath out. Watch what TeeRump does not what he says.
AC2usn
The proble, ac2, is that Donnie is setting himself, and the U.S., up for issues. Every tantrum, every tariff and every insult to a host is catalogued and remembered. The paybacks for the behavior of the U.S. will be extensive and extended. I expect the next President will try to reenter the Paris agreement, and I expect it to cost the U.S. in terms of cuts and actions much more than saying in would have.
ReplyDeleteThe willful vandalism of international relations and norms by these children is the last thing we need as we stagger toward the precipice.
Germany has given up on us as a reliable partner, and says that Trump's removal might not change that now that we've shown ourselves capable of electing someone like him.
ReplyDeleteThey are now looking elsewhere for reliable partners.
The things he is playing with are serious and should not be played with.
-Doug in Oakland
When Major Strasser offered a safe-conduct guarantee, Ilsa Lund said: "Of what value is that? You may recall what German guarantees have been worth in the past."
ReplyDeleteTrump has demonstrated that America's word, America's promises, are valueless. He has done incalculable damage to America's standing in the world.
So one has to ask: Who benefits from that?
Mexico needs our commerce more than we need them. They know it.
ReplyDeleteMexico could stop the flow of migrants any time they choose.
I'll bet the migrants flow through Mexico slows, if not stop dramatically, in the near future.
"Germany has given up on us as a reliable partner, and says that Trump's removal might not change that now that we've shown ourselves capable of electing someone like him."
What you mean is that Germany can't depend on the US to be a patsy and pay the bills and knuckle under like in the past. All of a sudden, Deutschland is having to deal with a country that treats them as they should have been treated for the past few decades, and they don't like it.
B., your assumption about Mexico needing the U.S. more than we need them might be rather incorrect. The impact of these tariffs is likely to be worse for the U.S. than Mexico. The U.S. can not afford to expel all the Mexicans without legal status because of the amount of work they perform, a number of U.S. companies will be hurt badly by an effort of this type and the simple reality is it will probably be easier for Mexico to just say “fuck it” and loosen their controls on migrants. The U.S. will have no choice but to buy Mexican fruits and vegetables, increasing the costs of these products in the U.S. some U.S. producers will increase prices to make s9me money, but won’t increase pay until they have to, and if all the migrant farm workers were sent home, they couldn’t harvest their crops.
ReplyDeleteThe interconnection of U.S./Canada/Mexico is much more than most people realize, and Donnie is busy peeing in the punch bowl (or, perhaps, rice bowl).
Creating excuses for this president’s behavior is the new normal for the right. The artificial “crisis” created by the racist-in-chief and his tariff response will only harm Americans but the stubborn right will never admit it nor listen to reason. As long as those brown people are kicked out of “our” country, that’s good enough for them.
ReplyDeleteDale
Explain this to me:
ReplyDeleteHow is it Mexico's problem that people want to leave Mexico? We don't prohibit our citizens from leaving.
Re the PLAN being invited to a port visit in Mexico: I've been wondering just how much more badly Puerto Rico would have to be treated until THEY invite a few Chinese warships in for a visit. Discussions about basing rights in exchange for economic development might be included as well.
ReplyDeleteTo date, PR has had four referendums on their status. The first three results were to remain as a territory, while the last one in 2012 may have called for statehood. Being treated as if they were just a less-favored third world country instead of part of the United States may well have tilted that opinion towards independence.
Under the Insular Cases, Puerto Rico couldn't invited the PLAN to visit or offer any basing rights.
ReplyDeleteB, you, like Trump, seem unclear about what a tariff is. It is NOT a tax paid by a foreign government to the USA. It's more like a national sales tax imposed on US citizens. Mexico won't pay for the tariffs any more than they paid for the wall. The damage is done to Americans.
ReplyDeleteComrade: It isn't the Mexican citizens that I was referring to, but rather the Central Americans and other from SOUTH of Mexico that are allowed to transit the southern border of Mexico and move northward to the US.
ReplyDeleteSteve: I am aware of how tariffs work and who pays them. What they DO do is make other, locally produced products more competitive and the Mexico (or whatever country) products more expensive, reducing the demand for them.
The problem is, B, that there are no domestic substitutes for the produce Mexico exports to America. People will pay higher prices due to the tariff, and the profits of Mexican farmers and other exporters will remain the same. Therefore, they have no incentive to do what Donny-boy wants them to do about migrants passing through on their way here.
ReplyDeleteHave you gotten tired of all the winning, yet?
Let's have a hypothetical exercise. Suppose Canada is the World's garden spot. South and Central Americans are wanting to move to Canada. To do so, they must travel by land across the United States. Suddenly, Canada turns racist and no longer wants to accept these immigrants. Is it the United States' duty/obligation to close the southern border to protect Canadian interests? What if Canada decides to put increasing tariffs on the US to "force" our hand. How would/should a country react to a foreign government trying to manipulate conditions and the affairs of a friendly neighbor?
ReplyDeleteAsking for a friend.
Dale
“These tariffs are designed to hurt Mexico economically,” CNN reporter Jake Tapper said to McAleenan. “Won’t they just exacerbate the problem? If things go bad economically in Mexico, won’t more people come in and cross the southern border illegally?”
ReplyDelete“These crossings into Mexico are happening on a 150-mile stretch of their southern border,” McAleenan responded. “This is a controllable area. We need them to interdict these folks before they make this route all the way to the U.S.”
Tapper then pointed out again that the conditions caused by Trump’s tariffs would incentivize more border crossings and thus make McAleenan’s job harder, a point that McAleenan refused to address.
https://talkingpointsmemo.com/news/dhs-secretary-kevin-mcaleenan-explain-trump-mexico-tariffs?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+tpm-news+%28TPMNews%29
A lot of manufacturing has become integrated with Mexico over the last few decades. So a lot of "American-made" products are going to go up in price because of Trump.
ReplyDeleteMoreover, how does anyone plan for making stuff in a global economy when Trump may bet a wile hair up his ass and, with the eager support of his Staff Nazi, slap tariffs willy-nilly?
Supply chains, especially for automobiles, will take a hit from these proposed tariffs, and no, that won't force American companies to cease operations in Mexico.
ReplyDeleteNone of these things are as simple as Trump wants his supporters to believe they are.
-Doug in Oakland
Given that some automotive items cross the U.S./Mexico border several times, the logical way to avoid tariffs is to move all the production and manufacturing into Mexico and pay a single tariff on the final item. This is because the final assembly point is, in most cases, in Mexico. For products whose final production is in the U.S., completion of the components entirely in Mexico serves the same purpose at lowest cost.
ReplyDeleteB., one hopes you are aware that U.S. manufacturers, in response to tariffs increasing the cost of imported goods and items have elected to increase prices but NOT invest in capacity or domestic production improvements. This causes inflationary pressure and increasing interest rates over time, certainly not what the economy wants.
No, B, what they DO do is make any other products more competitive. No matter where they're from. In the short-medium term locally produced goods only become more competitive if A) there's a local industry for that product and B) there aren't other non-local goods that outcompete the local ones.
ReplyDeleteSo what does Mexico export? Well a lot of electronics. So any competitive edge there probably isn't going to US producers (in fact it's likely helping to weaken any effect of Trump's China tariffs...) Then there's a great deal of vehicle assembly. That could shift to the US, but only after a few years to spin up the factories, move the necessary tools, etc. Of course just like the tariffs that makes the resulting cars more expensive and has the disadvantage of "baking in" that additional expense, unlike a tariff that might drop at any moment. So if that industry does move it won't be to a country that's guaranteed to be more expensive. So whatever happens, any competitive edge will go to non-US companies.
Then there’s ag products (about 1.6% of Mexican exports). That will make US products more competitive but there’s a huge seasonality component to that, as well as supply issues. It’s not like the US has vast amounts of cropland and farm labor just waiting for a job and that’s during the summer. In the shoulder seasons where things will still grow in Mexico, but not most of the US, the main effect will be to increase non-Mexican imports and/or pass the cost along to the consumer.
So all-in-all this is a very poorly thought out plan enacted by an impulsive leader. Hence why there’s so much bipartisan outcry...
Oddly, when there is an incentive, people move production back to the US:
ReplyDeletehttps://legalinsurrection.com/2019/06/us-plans-to-refine-its-way-out-of-potential-rare-earths-crisis/
And Tariffs provide some of that incentive. Production facilities in the US, strangely enough, employ (mostly) US citizens....and those wages are spent here in the US as well.
How is that bad for the country?
You can't replace the vegetables, or reroute the supply chains to be purely domestic in origin.
ReplyDeleteB., your statement “Production facilities in the US, strangely enough, empty (mostly) US citizens...”, is clearly rather incorrect based upon the meat packing, food processing, carpet production, dry cleaning, massage parlor, farm, etc raids that are constantly on TV.
ReplyDeleteAlso, this will amount to the largest tax hike since Poppy Bush, so it's now safe to say that Trump owns the Republican party, and vice versa.
ReplyDelete-Doug in Oakland
B, you're conflating a strategically important resource that's currently controlled by a single, adversarial nation to basic durable goods and consumables. Not a very effective argument.
ReplyDeleteFostering a domestic rare-earth industry is a good idea that should have been pursued a long time ago. That it's happening now is only related to Trump's tariffs in that he should've realize our balls were in that particular vise before running his mouth. This is "oh shit, we're screwed!" rather than "aha, China is really going to feel the pain now!"
A bit like synthetic rubber in the '40s.
So since they thought there was a market for US made Rare Earths, someone chose to invest.
ReplyDeleteWhat makes you think that auto parts would be any different?
What makes Washing Machines different?
Air conditioners?
Dishwashers?
Fridges?
Stoves?
Etc. All goods produced somewhere else that could be produced here, except that Big Labor and Government regulators have made it more profitable to manufacture somewhere else....but Tariffs change that somewhat.
I'll grant the farm produce isn't like manufactured goods, however.
Why do you think that keeping manufacturing outside of the US is good for the country and it's people?
OK B, time to pull out the trump card (if you will).
ReplyDeleteWhat if "Barry" (your cloying cute name for President Obama) had imposed these tariffs? IF you have any honesty left (I doubt) you would admit that you and the Republicans would be losing their shit. It is just as bad when the stupid action is done by Trump.
Except that "Barry" would never have been dumb enough to do it.
What makes you think that auto parts would be any different?
ReplyDeleteWhat makes Washing Machines different?
Air conditioners?
Dishwashers?
Fridges?
Stoves?
Innovation and research.
Why do you think that keeping manufacturing outside of the US is good for the country and it's people?
Because it costs less to do so because of labor costs. You want people to pay more for goods?
Re: I didn't like Barry's trade policies for the exact reason: He drove manufacturing AWAY from the US.
ReplyDeleteDA: I care about my country's economy and the citizens more than I care for goods that cost a few percent less. Employing our citizens and having a manufacturing base is preferable to saving 2% or so.
And you have avoided the question as to why, when there was a good reason to invest in a manufacturing plant in the us, someone chose to do so....so why wouldn't others choose to manufacture the above (and other) goods in the US when the tiny savings that manufacturing them in the US disappears?
You want people to buy stuff made here without raising their wages? Good luck with that.
ReplyDelete