Tariff Temper Tantrum


Facing an escalating showdown with Mexico and an insurrection from his own party, President Trump said Friday the United States had reached a deal with Mexico to avert a 5% tariff on all imported Mexican goods that was due to take effect today and increase to 25% by October. Trump’s announcement came after three days of Mexico-U.S. negotiations in Washington. Officials said it was based around Mexico’s commitment to deploy National Guard forces throughout the country, in particular to its southern border, in order to stem the flow of northbound migrants headed toward the US. Under the deal, they said Mexico also agreed to expand what is known as the Remain in Mexico policy, which allows the U.S. to send back Central American asylum-seeking migrants to Mexico while their cases make their way through immigration courts. However, on Saturday, The New York Times reported that the plan to send troops to the border had already been agreed to in March. We speak with Lori Wallach, director of Public Citizen’s Global Trade Watch and author of “The Rise and Fall of Fast Track Trade Authority.”

AMY GOODMAN: Facing an escalating showdown with Mexico and an insurrection from his own party, President Trump said Friday the United States reached a deal with Mexico to avert a 5% tariff on all imported Mexican goods that was due to take effect today and increase to 25% tariff, across the board on Mexican goods, by October. Trump’s announcement came after three days of Mexico-U.S. negotiations in Washington. Officials said it was based around Mexico’s commitment to deploy National Guard forces throughout Mexico, in particular to its southern border, in order to stem the flow of northbound migrants headed to the United States. Under the deal, they say Mexico also agreed to expand what is known as Remain in Mexico policy, which allows the U.S. to send back Central American asylum-seeking migrants to Mexico while their cases make their way through immigration courts in the United States.

However, on Saturday, The New York Times reported the plan to send troops to the border had already been agreed on in March. Trump lashed out on Twitter Monday morning by attacking The New York Times, writing, “The Failing @nytimes story on Mexico and Illegal Immigration through our Southern Border has now been proven shockingly false and untrue, bad reporting, and the paper is embarrassed by it. The only problem is that they knew it was Fake News before it went out. Corrupt Media!” he tweeted.

In a statement Saturday, House Speaker Nancy Pelosi said, “President Trump undermined America’s preeminent leadership role in the world by recklessly threatening to impose tariffs on our close friend and neighbor to the south. Threats and temper tantrums are no way to negotiate foreign policy,” she said.

Trump’s plans also drew resistance from some Republican leaders, including Mitch McConnell, who threatened a congressional revolt.

Meanwhile, in Mexico, President Andrés Manuel López Obrador hailed the agreement at a rally with thousands of supporters Saturday. He said migrant rights will be protected.

PRESIDENT ANDRÉS MANUEL LÓPEZ OBRADOR: [translated] We have signed our commitment to contributing to migrants not crossing through national territory to reach the United States. We would never do this by violating the human rights of travelers. And that starts with human rights, the right to live free from misery, the right to life. … It would be fair to try and punish Mexico to try and stop immigration, whilst there is a need for welfare and security in home countries for migrants and a search for brotherhood amongst peoples. We celebrate yesterday’s important agreement because things were becoming very difficult, very uncomfortable.

AMY GOODMAN: To talk more about the deal and its implications, we go to Washington, D.C., to talk with Lori Wallach, director of Public Citizen’s Global Trade Watch, author of The Rise and Fall of Fast Track Trade Authority.

Lori, welcome back to Democracy Now!

LORI WALLACH: Good morning.

AMY GOODMAN: What happened over these last weeks, when President Trump threatened Mexico with across-the-board 5%, to be increased to 25%, tariffs on all Mexican goods? Republicans, led by the Senate majority leader, McConnell, said they would revolt. And then Trump said he forced—essentially, he forced Mexico to its knees. Explain what happened.

LORI WALLACH: Trump created a fake crisis and has announced a fake “solution” that actually is terms that already the U.S. and Mexico had agreed months ago. Plus he announced something that I think just isn’t—can’t happen, which is “large agricultural sales,” except Mexico is a market economy. The government does not control what’s sold. There also are no tariffs. So it’s not like you can make a trade deal to increase agricultural sales. So, that part seems to be altogether made up.

But if you read the actual summary of the agreement between the two countries or you look at this weekend’s tweets, the president is also simultaneously saying, “And if I don’t get my way, we can put the tariffs back up.” And so, he’s basically, to quote Nancy Pelosi, having another “tariff temper tantrum,” and he’s sort of threatening that maybe the tariffs will come back.

But that, really, is, at the highest level, an indication that his racist border immigrant obsession really trumps everything else, because having this tariff tantrum over Mexico really is not helpful to the renegotiation of NAFTA, where the Democrats actually have been working to force improvements to the deal Trump signed, with the prospect that maybe they would actually pass something, except the tariff hysteria has really undermined that process.

AMY GOODMAN: Didn’t he introduce this, the possibility, the threat of the tariffs, right around the exact time that President Obrador introduced the new NAFTA—what, the U.S.-Mexico trade agreement—into his legislature to be approved?

LORI WALLACH: It’s a very peculiar set of circumstances. So, here’s what’s happening with the revised NAFTA. The deal that Trump signed at the end of last year is not the transformational replacement of the corporate-rigged trade model we need, but they made some improvements. So, for instance, they largely got rid of investor-state dispute settlement, those outrageous corporate tribunals. So, what the Democrats have been doing is trying to work with the one sane Cabinet member, U.S. Trade Representative Lighthizer, to take out a bad thing they added: They let Big Pharma put in some new monopoly rights that would lock in high medicine prices; that has to come out. And the Democrats have been working to try and get the labor and environmental standards improved and their enforcement much strengthened, because that’s necessary if the agreement is going to stop the outsourcing of jobs and pollution.

So, while that discussion is going on over here, and there’s some hope that maybe those improvements can be made and the agreement would be worth something—if not perfect, by a long shot, worth supporting—and could actually stop some of the ongoing serious damage to workers and the environment in North America that NAFTA is causing—that’s trucking along here. And all of a sudden Trump comes in with this racist border obsession and basically derails that whole discussion. Now, will it get back on track? Maybe. But not if these threats of tariffs are endlessly hanging over the head of the whole process.

AMY GOODMAN: I wanted to go to the acting Secretary of the Department of Homeland Security Kevin McAleenan, who was asked what part of Trump’s agreement with Mexico is new. He was speaking on Fox News Sunday.

ACTING DHS SECRETARY KEVIN McALEENAN: All of it is new. I mean, we’ve heard commitments before from Mexico to do more on their southern border. The last time they deployed down there, it was about 400 or 500 officers. This is more than a tenfold commitment to increase their security in Chiapas. That’s where people are entering from Guatemala in southern Mexico. … The president put a charge in this whole dialogue with Mexico with the tariff threat, brought them to the table. The foreign minister from Mexico arrived within hours. He arrived the next day with real proposals on the table. This is the first time we’ve heard anything like this kind of number of law enforcement being deployed in Mexico to address migration, not just at their southern border but also on the transportation routes to the northern border and in coordinated patrols in key areas along our southwest border.

AMY GOODMAN: So, that’s the acting head of Homeland Security, because Trump purged almost the entire leadership there, that was originally appointed by him, Kevin McAleenan. Your response, Lori Wallach?

LORI WALLACH: Well, according to not just The New York Times reporting but numerous outlets, that exact agreement had been made months ago by the ousted previous secretary, Kirstjen Nielsen. And, in fact—anyone can google—there have been a whole series of stories, actually, about how a lot of the border towns in Chiapas have become basically armed camps, where the bus stops and the hotels, the inexpensive hotels where migrants were staying, are now being raided. This is happening already, at the moment.

So, it seems like it’s another instance of Trump, perhaps as a distraction from the Democrats making clear the NAFTA deal he signed, as is, would not stop job outsourcing, would lock in high medicine prices—maybe he wanted to change the subject, so he creates a crisis. Maybe it was because he was worried about continuing fallout from the Mueller report. He created a crisis. He set an arbitrary deadline. He claims he got a deal, which doesn’t exist. And then he’s sort of leaving the crisis brewing on the sidelines for more chaos later.

And when you think about the NAFTA replacement, that could be the only good policy that might come out of this entire administration, and the president basically just clearly prioritizing not delivering on his promise to stop the outsourcing and to replace NAFTA, because he’d rather create the chaos with his obsession over his racist border plans, that says a lot, that hopefully gets out to American voters.

AMY GOODMAN: Trump tweeted Saturday, ”MEXICO HAS AGREED TO IMMEDIATELY BEGIN BUYING LARGE QUANTITIES OF AGRICULTURAL PRODUCT FROM OUR GREAT PATRIOT FARMERS!” Well, this is Mexico’s ambassador to the United States responding to Trump’s statement on Face the Nation Sunday. She was questioned repeatedly by host Margaret Brennan about whether the president’s claim was accurate.

MARGARET BRENNAN: Was there any kind of agreement by your government to buy agricultural products?

MARTHA BÁRCENA COQUI: It is our understanding that without tariffs and with USMCA ratification, there will be an increased rate both in agricultural products and manufactured products. Even now—

MARGARET BRENNAN: But nothing that was actually agreed to as part of this negotiation? Because the president has been tweeting, saying that Mexico agreed to buy all sorts of agricultural products.

MARTHA BÁRCENA COQUI: I would—what I would say is that, even now, we are the second buyer of the U.S.—

MARGARET BRENNAN: Right.

MARTHA BÁRCENA COQUI: —in grains and meat and this. We have an integrated economy in the agricultural sector. … The trends are already there. So, what we are expecting, without the tariffs, is an increase. You have to remember that, until last year, we were the third trade partner. We are now the first.

MARGARET BRENNAN: But there was no transaction that was signed off on as part of this deal, is what I understand you’re saying. You’re just talking about trade.

MARTHA BÁRCENA COQUI: I’m talking about trade.

MARGARET BRENNAN: Understood.

MARTHA BÁRCENA COQUI: And I am absolutely certain that the trade in agricultural goods could increase dramatically in the next few months.

AMY GOODMAN: So, that’s Mexico’s ambassador to the U.S., Martha Bárcena Coqui. Lori Wallach, explain exactly her response and also what Trump said about Mexico promised to buy a large amount of agricultural products from the United States.

LORI WALLACH: Well, she’s trying to be diplomatic, because she knows the president has left the tariff threat out there hanging. But as a practical matter, it’s a free market economy in Mexico, so it’s not, for instance, with China, where the government can say, “We will buy this many billions of dollars of whatever.” What gets bought for U.S. agricultural products in Mexico is determined by various trading companies, grain companies, grocery retailers, etc. So, it’s not something that the government—as a practical matter, it’s not the kind of deal the government can say, “We will by this.”

On the other hand, the notion, frankly, that the ambassador has put out that there will be more trade is a little silly, because there are already zero tariffs. So it’s not that tariffs will be cut. Agricultural trade between the U.S. and Mexico has been zero tariffs for 15 years. So, even the notion that the trade will grow—I mean, I suppose if the population grows, the economy grows, demand could grow. But it’s not like there will suddenly be an increase.

The real issue with what she called the USMCA—it doesn’t deserve a new name yet—NAFTA 2.0, is whether or not the remaining business is going to get done of taking out the new monopolies Big Pharma was able to rig into the deal, that Trump signed, and adding in the stronger labor and environmental standards and stronger enforcement. The new Mexican president is much more supportive of workers’ rights, and he wants to raise wages. He has passed a domestic labor law that would implement the best labor part of the existing NAFTA 2.0. If that were ever truly implemented, it could be transformational. For the first time, it would give Mexican workers the right to have real unions, to have contracts that they vote on, not fake contracts, “protection contracts,” that protect the company and lock in low wages. But that legislation has to be implemented. There’s a lot of fightback from elite industry in Mexico. But also, after AMLO is gone, the agreement has to have enforcement so that it doesn’t get rolled back.

That’s the mission right now, if the tariff sword of Damocles doesn’t end up chopping up the whole process, which is, Speaker Pelosi has been remarkably strong, and the House Democrats united, to say to the trade representative, “If you get rid of the pharma giveaways and you add the labor and environmental standards and their enforcement, this could be a deal that’s worth having,” because it has that labor-organizing Mexico part, it gets rid of ISDS, fixes some other stuff—it’s not perfect, but it would be a step in the right direction. So, here, with the prospect of actually replacing NAFTA, that Trump said was his top priority to stop outsourcing, what does he do? He blows it up with these tariff threats.

AMY GOODMAN: Trump sent out a flurry of tweets Saturday about the deal. In one, he lashed out at House Speaker Nancy Pelosi, writing, quote, “Nervous Nancy Pelosi & the Democrat House are getting nothing done. Perhaps they could lead the way with the USMCA, the spectacular & very popular new Trade Deal that replaces NAFTA, the worst Trade Deal in the history of the U.S.A. Great for our Farmers, Manufacturers & Unions!” So, I’d like to go back to House Speaker Nancy Pelosi’s comments about NAFTA earlier this year during an interview with Politico.

SPEAKER NANCY PELOSI: The concerns that our members have are workers’ rights, the environment and issues that relate to pharmaceuticals. Those are the issues. The overarching concern that we have is, even if you had the best language in the world in that, if you don’t have enforcement, you ain’t got nothing. That’s just the way it is. You have to have strong enforcement provisions. Now, one of the things that the Mexican government has to do before we could even consider it is to pass legislation about workers’ rights in Mexico.

AMY GOODMAN: And now I want to turn to then-Senator Biden, before he was vice president, speaking in 1994 during the original debate on NAFTA. He said NAFTA was the positive thing to do, despite workers having a legitimate reason to be concerned.

SEN. JOE BIDEN: I’m supporting NAFTA because I think it is a positive thing to do, but not because I think it’s going to cure the workers’ fears, who have legitimate reason of be concerned. It will not exacerbate their concerns. It will not exacerbate their circumstance. But it will not help it very much in the short run.

AMY GOODMAN: So, that was, yes, Senator Joe Biden in 1994 and, before that, Pelosi. Lori Wallach, you’ve been deeply involved in the struggle against NAFTA. Your response?

LORI WALLACH: Well, first of all, unfortunately, Senator Biden has—Vice President Biden has said supportive things about NAFTA more recently.

But also, the reality is, the U.S. government has certified almost 1 million U.S. workers as having lost their jobs to NAFTA. So it did get much worse. The Mexican government has documented that, in real terms, Mexican manufacturing wages are down since NAFTA, so workers there also didn’t win. Right now Mexican manufacturing wages are 40% lower in real terms than Chinese manufacturing wages. The same exact U.S. plant moves to Mexico and turns a middle-class job into a sweatshop job, from 25 bucks an hour, for instance, a good year in the U.S., with the steelworkers representing the workers, to a buck-fifty-eight in Mexico without the safety guides. And when the workers went on strike because of the conditions and low wages, they were fired, because they had broken their fake contract that locked in those wages.

That is the reality of NAFTA. That’s why the agreement has to be replaced. That’s why the Democrats are fighting for those changes the speaker talked about, because the deal Trump signed, as is, wouldn’t stop that race to the bottom in wages and outsourcing, and it would lock in high medicine prices with these new monopoly rights that were added for Big Pharma. But if the monopoly rights for pharma can come out, and the labor and environmental standards and much stronger enforcement can go in, it would be worth having a deal like that, that also takes out the investor-state corporate tribunals, because the damage of NAFTA continues every week. Every week, another union is being busted in Mexico. Every week, jobs are being outsourced from the middle class to sweatshops. Same hard-working folks. The only difference, two countries, one agreement. The rules have to change. ISDS cases still being filed every week.

We have got to replace NAFTA. The question is whether Trump will end up basically derailing this process that, despite him, his trade representative and the House Democrats have been working on to try and fix, improve the agreement he signed, to get it to a point where it would be worth having, at least to try and stop some of that ongoing damage, even if it wouldn’t be perfect.

AMY GOODMAN: Finally, Lori Wallach, the message that has been sent, over everything that’s taken place until now, when President Trump, you know, announces that they will not be imposing the 5% to 25% tariffs across the board in Mexico, what this means for other countries around the world?

LORI WALLACH: What, basically, this arbitrary threat of the use of tariffs over a racist immigration policy is indicating is that this president is going to basically misuse tariffs and trade policy. So, tariffs are a legitimate policy tool. If you watch a lot of mainstream television or read The New York Times, you sort of think of tariffs as a deadly disease. No, when we talk about trade sanctions, for instance, for labor violations or for environmental violations, a tariff is a policy tool that actually is part of how you regulate trade in the global economy. However, what you use tariffs as a tool to achieve, this president has just blown up, with basically taking it off of trade, taking it off of even commerce, and putting it on, effectively, trying to build his border wall by tariffs instead of bricks.

AMY GOODMAN: Lori Wallach, I want to thank you so much for being with us, director of Public Citizen’s Global Trade Watch, author of The Rise and Fall of Fast Track Trade Authority.

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