U.S. manufacturers will be hurt most from Trump’s tariffs on Mexico: Analyst
The U.S. Chamber of Commerce is considering legally challenging President Donald Trump’s plan to impose tariffs on all Mexican goods as a way to curb illegal immigration, a top official said Friday, as the administration’s intensifying trade fight roiled markets.
“We would like to persuade the administration that there are better ways to deal with" immigration concerns at the southern border, Executive Vice President and Chief Policy Officer Neil Bradley said in an interview Friday. The Chamber is "also exploring what legal options might be available," he said.
The powerful business group blasted the White House’s announcement on Thursday that the U.S. will put 5 per cent duties on all Mexican imports starting on June 10. Trump said the tariffs could rise in increments to 25 per cent in October unless Mexico halts “illegal migrants” heading to the U.S.
In addition to exploring its legal options, Bradley said that the Chamber would lobby both the White House and Congress to explain the negative impact the tariffs would have on American consumers.
“Imposing tariffs on goods from Mexico is exactly the wrong move," Bradley said in a statement Thursday. "These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border. Instead, Congress and the president need to work together to address the serious problems at the border."
The Chamber also issued a state-by-state analysis on the economic impact of the tariffs. The data show, for example, that in Texas, a 5 per cent tariff would threaten US$5.35 billion of state imports, while a 25 per cent tariff would imperil US$26.75 billion of state imports.
The U.S.’s largest business lobby, which has historically supported Republican presidents, has been increasingly critical of the Trump administration’s positions on trade and immigration, among other issues. This year, it revamped its scorecard that tallies how lawmakers vote on legislation important for the business community for the first time in 40 years to put more focus on efforts at bipartisanship.
Trump’s threat to escalate tariffs on Mexican goods upset markets, pushing U.S. stocks to the worst weekly loss since Christmas, and added pressure on automakers. The move also drove the Mexican peso down more than 2 per cent and tanked bond yields.
The tariff announcement came the same day that Trump presented notice to Congress to pass his renegotiated version of the North American Free Trade Agreement, which has allowed tariff-free trade with Mexico and Canada since it came into effect in the 1990s.
Groups representing various businesses and industries argued that imposing tariffs wouldn’t address America’s immigration challenges and instead would threaten the administration’s trade priorities in Mexico.
“Unilateral tariffs on all Mexican imports will not solve the urgent problems of securing our border and fixing our broken immigration system," the Business Roundtable said in a statement. "We urge the administration to engage constructively with our neighbors and allies to resolve trade, migration and security issues in ways that will benefit Americans, not cause economic damage.”
The National Association of Manufacturers said the “proposed tariffs would have devastating consequences on manufacturers in America and on American consumers," according to a statement Friday.
The administration said Thursday’s plan to increase tariffs on the U.S.’s southern neighbor wasn’t linked to Trump’s Nafta replacement, the United States-Mexico-Canada Agreement, which the White House is presenting as his No. 1 legislative priority.
Manufacturers have been working hard to secure passage of USMCA and "the last thing we want to do is put that landmark deal -- and the 2 million manufacturing jobs that depend on North American trade -- in jeopardy," the manufacturers’ association said in the statement.