WTF Just Happened Today

Friday, May 31, 2019

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1/ Trump threatened to impose a 5% tariff on all Mexican goods unless the country stops all "illegal migrants coming through Mexico," linking his immigration policy to trade. The tariffs would begin on June 10th and "gradually increase" to 10% on July 1st, followed by an additional 5% each month for the next three months. Tariffs would remain at 25% "if the crisis persists." The National Foreign Trade Council called the move "a colossal blunder," as U.S. companies pay the import penalties and pass some costs along to consumers. The White House defended the legality of the move, saying Trump was acting under the powers granted to him by the International Emergency Economic Powers Act, which gives the president broad power to take action to address any "unusual or extraordinary threat." (Washington Post / New York Times / The Guardian / Reuters)

2/ Republicans warned Trump that imposing tariffs on all Mexican imports could upend the United States-Mexico-Canada Agreement and undermine the economy. Senate Finance Chairman Chuck Grassley called the move "a misuse of presidential tariff authority and contrary to congressional intent," adding that implementing the tariffs would "seriously jeopardize passage" of the USMCA. Sarah Huckabee Sanders, meanwhile, blamed Congress for refusing to deal with problems at the border, saying if they "were stepping up and doing more the president wouldn't have to continue to look for ways to stop this problem on his own." (Politico / Washington Post)

• The U.S. Chamber of Commerce and business groups are considering suing the White Hose over Trump's new tariffs on Mexico. The tariff threat was reportedly "hurried out the door" in order to appease Trump, who did not consult business groups or federal agencies in advance. A 5% tariff on imported goods from Mexico would result in a potential tax increase on American businesses and consumers by about $17 billion. That would eclipse $86 billion if the tariffs reach Trump's cap of 25%. (CNBC / NBC News / U.S. Chamber of Commerce)

3/ Trump's Treasury secretary and top trade advisor both opposed the plan to impose tariffs on Mexico. Steve Mnuchin and Robert Lighthizer have stressed the importance of enacting USMCA, meant to replace the North American Free Trade Agreement, and argued that the tariffs could derail ratification of the deal in Congress. "Lighthizer is not happy," an unnamed administration official said. The tariff strategy was spearheaded by White House adviser Stephen Miller, an immigration hawk, after Trump was "riled up" by conservative radio commentary about the recent surge in border crossings. (...

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