Tariff threats
After Mexican negotiators agreed to take drastic border measures to prevent the influx of Central American migrants into Mexico, President Trump was able to declare victory and back down from his tariff threats against our single-largest trading partner.
“We have fully signed and documented another very important part of the immigration and security deal with Mexico, one that the U.S. has been asking about getting for many years,” Trump tweeted on Monday. (Mexico has promised enforcement measures including the deployment of its national guard at the Guatemalan border and thousands of additional migrant arrests per week, along with changes to its asylum program that must first be approved by that country’s lawmakers.)
Critics have pointed out that Mexico had already agreed — if vaguely — to most of these concessions in the past.
But Trump believes his bullying tactics worked, which means he’s certain to try them again — possibly very soon.
During an interview on CNBC on Monday, Trump was vowing to hit China with more tariffs.
It’s hard to overstate how destructive and self-defeating Trump’s policy of tariff threat diplomacy is.
While U.S. consumers have yet to feel the full impact of the Chinese tariffs put in place by the Trump administration in 2018 and this year, the National Retail Federation is warning U.S. consumers to expect higher prices on everything from bicycles to personal care products.
There’s already been an increase in bankruptcies among U.S. farmers, who have already been negatively affected by retaliatory tariffs implemented by China. Economists estimate the Chinese trade battle could shave off as much as a halfpercentage point of economic growth next year.
As distressing as those may be, they pale in comparison to the potential impact of Trump’s Mexico tariffs.
According to an analysis from the Perryman Group, Trump’s threatened 5% tariff on Mexican imports, if maintained, would cost the U.S. more than 400,000 jobs.
That loss may have been avoided for the moment. But we’re still bracing for the unknown impact of Trump’s blustering attempt to punish our trade allies, which may have a greater cost than economists can currently predict.