Republicans are warning President Donald Trump that he could sabotage his hopes of a new trade agreement with Canada and Mexico if he follows through on plans to impose harsh new tariffs on the latter country.
The [U.S.-Mexico-Canada Agreement] would provide much-needed certainty to our agriculture community, at a time when they need it," Sen.
Joni Ernst (R-Iowa) said in a statement Friday. "If the president goes through with this, I’m afraid progress to get this trade agreement across the finish line will be stifled."She joined Senate Finance Chairman Chuck Grassley (R-Iowa) and a number of business groups who criticized Trump's latest tariff move and warned it could imperil approval of the replacement for NAFTA, the president's top legislative priority.
Trump said Thursday night that he planned to impose a 5 percent duty on all Mexican goods beginning June 5 to pressure Mexico to do more to stop illegal border crossings into the United States. That duty will increase to 10 percent on July 1 and rise by 5 percentage points each month until it reaches 25 percent on Oct. 1 if Mexico does not satisfy his demand.
But the move to link immigration policy and trade is drawing sharp criticism from members of Trump's own party.
"Trade policy and border security are separate issues," Grassley said. "This is a misuse of presidential tariff authority and counter to congressional intent. Following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump’s and what could be a big victory for the country.
"Grassley urged Trump to consider a different approach, "such as imposing a fee on the billions of dollars of remittances that annually leave the United States to Mexico, which only encourage illegal immigration and don’t help the U.S. economy."
Ernst said she also supported efforts to stop the illegal entries, but "this isn't the right path." She said she was worried it would endanger the livelihood of Iowa farmers who depend on exports to Mexico for part of their income.
Mexican President Andrés Manuel López Obrador said in a letter to Trump on Thursday night that he will not impose retaliatory measures; instead, he wants to deepen dialogue between the two countries to address the migratory situation.
"Social problems don't get resolved with duties or coercive measures," López Obrador said. "I don't believe ... in 'an eye for an eye.'"
The USMCA agreement that Trump is trying to get through Congress provides for tariff-free trade between the three North American neighbors. Administration officials on Thursday night sought to distinguish Trump's new tariff move from his desire to win approval of the new agreement, even though they seem contradictory.
White House budget director and acting chief of staff Mick Mulvaney said Trump resorted to the tariff move because Democrats in Congress refused to act.
"I can personally tell you it's been at least six weeks since I met with Senate Democrats to literally beg them [for help with the] situation," Mulvaney said. "Instead of helping us, they left town. So, now we are asking Mexico to do what it can, because Congress will not."
Trump is prepared to take tariffs to 25 percent if that is what is needed to stop the illegal crossings, but sincerely hopes it will not come to that, Mulvaney said.
"We actually have some level of confidence that the Mexicans government will be able to help in a very, very timely fashion," Mulvaney said.
But both national and border state business groups also quickly blasted the idea.
“Imposing tariffs on goods from Mexico is exactly the wrong move," Neil Bradley, chief policy officer at the U.S. Chamber of Commerce, said. "These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border."
Glenn Hamer, Arizona Chamber of Commerce and Industry president and CEO, called Trump's move "baffling" and "terribly damaging" to the U.S. economy if implemented.
"It completely contradicts the spirit of NAFTA, not to mention the USMCA that we’re attempting to ratify," Hamer said.
Paola Avila, chair of the Border Trade Alliance, said Trump was undermining the United States' ability to strike trade deals with any country by threatening new duties on Mexico, just seven months after signing a new agreement that locks in the 25 years of duty-free trade the three countries have had under NAFTA.
“The president’s plan, if executed, will do tremendous harm to our relationship with Mexico, to our country’s ability to adopt new trade agreements going forward, and to U.S. consumers, who will be the ones who will pay for these tariffs," she said.
Article originally published on POLITICO Magazine