Speaking on the Senate floor Tuesday, Chuck Schumer said Donald Trump isn’t likely to follow through on his threat to slap Mexico with tariffs.
“[It’s] an erratic” idea that would be “massively destabilizing”, Schumer remarked, adding that the president has a penchant for bombast, only to “retreat” after realizing that the ideas which “pop into his head” are contrary to common sense.
Maybe Chuck is talking about a different Donald Trump than we are, or perhaps he’s just extrapolating from the shutdown episode, one of the rare cases when Trump actually was forced to relent. The fact is, when it comes to protectionist trade policies, Trump has time and again proven that he is, in fact, a “Tariff Man”, and that just about the only thing that can compel him to back down when he decides to slap America’s trade partners with punishing levies is a stock market rout grievous enough to threaten his approval rating.
If we learned anything from last month, it’s that Trump isn’t at all averse to taking the tariff fight to its (il)logical extreme. Indeed, it sounds like the only thing that stopped Australia from joining Mexico and India on the list of countries to suffer Tariff Man’s wrath last week was the Pentagon. Not even Jared Kushner was capable of restraining Trump when it came to Mexico.
There’s now some hope that top Republicans might (finally) step in to avert a disaster. On Monday evening, the Washington Post reported that the GOP is discussing “whether they may have to vote to block President Trump’s planned new tariffs on Mexico.” As the Post observed, a vote to rebuke the White House would represent “the GOP’s most dramatic act of defiance since Trump took office [and] could also have the effect of blocking billions of dollars in border wall funding that the president had announced in February when he declared a national emergency at the southern border.”
Earl Blumenauer, chairman of the Ways and Means subcommittee on trade, said Tuesday that lawmakers are meeting to discuss their options.
Trump of course overrode the original congressional resolution aimed at nullifying his border “emergency”, but the plan to hit Mexico with tariffs in an effort to compel the country to crack down on the flow of migrants may be a bridge too far for lawmakers.
“As frustration on Capitol Hill grows over Trump’s latest tariff threat, a second vote could potentially command a veto-proof majority to nullify the national emergency, which in turn could undercut both the border-wall effort and the new tariffs”, the Post goes on to say, adding that while Republicans aren’t particularly excited about hitting “Tariff Man” with veto-proof kryptonite, “some feel they might have to take action following a growing consensus within the GOP that these new tariffs would amount to tax increases on American businesses and consumers — something that would represent a profound breach of party orthodoxy.”
Apparently, Trump doesn’t yet have a strategy on how he would respond to a veto-proof resolution. The idea is to simply intimidate Mexico into acquiescing to something, although, thanks to the open-ended nature of Trump’s proclamation, it’s not entirely clear what.
For his part, Mexican foreign minister Marcelo Ebrard continued to strike an upbeat tone, telling reporters in Washington he’s “80% sure” Mexico can strike a deal with Trump that averts the tariffs. AMLO said on Tuesday that he believes the US and Mexico “will reach an accord before the 10th of June.”
That said, Bosco de la Vega, head of Mexico’s agriculture chamber CNA, warned that if Trump goes ahead with the duties on Mexico, the country will likely retaliate with duties of its own on agricultural products from states where the president’s support is strong, a similar strategy to that employed by the Chinese. That would be yet another blow to American farmers. De la Vega also said Mexico is seeking out new markets for farm products, including Argentina, South Korea, Brazil and, amusingly, China. The country is aiming to slash its export exposure to the US to 50% over the next decade, from nearly 79% today.
Apparently, Mexico bought some 2.5m tons worth of Brazilian corn last week to send a message, according to an analyst at ED&F Man Capital Markets in Argentina.
“It’s more likely the tariffs go on and we’ll probably be talking during the time the tariffs are on”, Trump said, while speaking alongside Theresa May on Tuesday. Asked about the prospect of the GOP moving to join Democrats in passing a veto-proof resolution to block his decision, Trump said “Oh I don’t think they will do that, I think if they did it’s foolish.”
And that gets at the heart of the issue. It’s still not clear what will ultimately transpire if and when Republicans do stand up to Trump and tell him no. More to the point: What would Congress do in the event they passed a veto-proof resolution and Trump simply instructed all of the relevant agencies to go ahead with his plan anyway?
Meanwhile, the Koch brothers aren’t amused. Americans for Prosperity sent top lawmakers a letter on Tuesday dubbing Trump’s prospective Mexico tariffs “the largest tax hike in modern history”. Oh, the irony – “Tariff Man” is negating the benefits of Trump’s only signature legislative achievement.
“It’s time for Congress to do its job”, the letter reads. “Given the potential damage to our economy and our national interests, we believe it is time for Congress to reclaim its constitutionally mandated authority to impose tariffs, and to prevent further unilateral tariff increases by the president.”
“I was in a meeting yesterday where there were two different opinions about whether a resolution of disapproval would be applicable in this instance”, Chuck Grassley said Tuesday. “Right now, I don’t think it’s even worth talking about because the Mexicans are coming up here tomorrow to talk to the administration, and I hope that something can be worked out.”
Fingers crossed, Chuck. Fingers crossed.