Thread: Trump may ‘end up torpedoing’ the new NAFTA after threatening Mexico with a costly ta

Trump may ‘end up torpedoing’ the new NAFTA after threatening Mexico with a costly tariff

Published 18 min ago
Yen Nee Lee

Key Points

U.S. President Donald Trump said Thursday that an additional tariff on Mexican goods would address what he claimed was a “border crisis” that resulted in America being “invaded by hundreds of thousands of people.”
Experts said Trump’s threat puts the fate of the United States-Mexico-Canada Agreement, or USMCA, in question.
Juan Carlos Hartasanchez, senior director at advisory firm Albright Stonebridge Group, said it seemed unlikely that the new version of NAFTA will be ratified this year.

The fate of the updated trade deal between the U.S., Mexico and Canada was thrown into question after U.S. President Donald Trump announced Thursday that his country plans to impose a 5% tariff on all Mexican imports from June 10.

Trump said in a White House statement on Thursday that the tariff was meant to address what he claimed is a “border crisis” that has resulted in America being “invaded by hundreds of thousands of people.” He said if Mexico doesn’t halt the flow of those undocumented migrants, the U.S. will progressively raise the overarching tariff to 25% by Oct. 1 this year.

John Negroponte, highly esteemed career diplomat and current vice chairman of consultancy McLarty Associates, said Trump’s announcement was “ill-timed” given that the process to ratify the three-country trade deal — called the United States-Mexico-Canada Agreement, or USMCA — has just kicked off.

“I think it’s both bad politically and bad economically and I don’t think it’s really going to help solve the immigration problem, either, which is what Mr. Trump said he’s trying to attack,” Negroponte, who served as U.S. ambassador to Honduras, Mexico, the Philippines, the United Nations, and Iraq, told CNBC’s “Street Signs.”

He noted that Mexico is a large export market for the U.S., so Trump’s Thursday announcement put American exporters at “a certain amount of jeopardy.” Mexico is America’s third-largest goods trading partner. The U.S. exported $265 billion of goods to Mexico in 2018, according to the Office of the United States Trade Representative.

Mick Mulvaney, acting White House chief of staff, told reporters that the tariff wouldn’t affect the approval of the USMCA. He insisted that the latest threatened tariff is “part of an immigration problem,” and isn’t related to trade.

But Negroponte is hardly the only one predicting a tougher route for ratification of the USMCA, which is intended to be an updated version of the North American Free Trade Agreement. Some say that the deal could have had an easy passage through Mexico’s Congress before Trump’s latest threats, but it has become politically difficult for lawmakers to ratify it now.

Juan Carlos Hartasanchez, senior director at advisory firm Albright Stonebridge Group, said it seemed unlikely that the USMCA will be ratified this year.

“Many congressmen and senators in Mexico are going to be asking themselves whether or not they’re in a position to ratify an agreement when they have a gun pointed to their heads. So it just becomes a very complicated situation,” he told CNBC’s “Street Signs.”

It’s not just Mexican lawmakers that will reconsider their stance on the trade deal, noted William Reinsch, senior advisor and Scholl Chair in international business at think tank Center for Strategic and International Studies.

The president’s threat “will probably end up torpedoing the USMCA agreement,” Reinsch told CNBC’s “Squawk Box.” He predicted that Mexico “will probably be forced to retaliate,” while the U.S. House of Representatives will also “react very negatively.”

The Democratic-led House has had lingering concerns about the new three-party trade deal. After U.S. Trade Representative Robert Lighthizer on Thursday sent a letter to congressional leaders to kick start the process of approving the USMCA, House Speaker Nancy Pelosi issued a statement suggesting that the deal lacks “strong enforcement provisions.”

https://www.cnbc.com/2019/05/31/trum...f-experts.html

After U.S. Trade Representative Robert Lighthizer on Thursday sent a letter to congressional leaders to kick start the process of approving the USMCA, House Speaker Nancy Pelosi issued a statement suggesting that the deal lacks “strong enforcement provisions.”

Really Nancy? Where are the "strong enforcement provisions" in our US immigration laws? If we had those, we wouldn't have an illegal immigration problem and wouldn't need to put tariffs on products from Mexico to stop invasions and regain control of our borders and country.

SHUT THE WHOLE BORDER DOWN FOR 3 DAYS!!!

TURN THEM ALL RIGHT BACK AROUND!

The original NAFTA has greatly damaged our country and has served to bring in more illegals. We don't need it and we certainly don't need a NAFTA on steroids to replace it! Trump promised during his campaign that he was going to shut NAFTA down. Well, here we are two and a half years later and NAFTA is still alive and kicking.

The costs of any tariff imposed on Mexico will ultimately be passed along to American consumers. (Remember: Tariffs are paid by importers, not by exporting countries.)
So what does that mean? Tariffs will affect the supply chain for ...

• The US auto industry
• Machinery
• Medical instruments
• Avocados and tomatoes (and plenty of other fruit and vegetables.)

And it's a two-way street. Americans sold just shy of $300 billion in goods to Mexico in 2018 — cars, machinery, pork and beef. Billions and billions dollars worth of many different type of goods that might be subject to retaliatory tariffs from Mexico.

https://www.cnn.com/politics/live-ne...019/index.html

TAX THE REMITTANCES!!!

STOP THIS INVASION!

MEXICO CLEAN UP YOUR ACT BECAUSE YOU HURT EVERYBODY EVEN YOUR OWN CITIZENS!!!

U.S. President Donald Trump says China pays the tariffs he has imposed on $250 billion of Chinese exports to the United States.

But that is not how tariffs work.

China’s government and companies in China do not pay tariffs directly. Tariffs are a tax on imports. They are paid by U.S.-registered firms to U.S. customs for the goods they import into the United States.

Importers often pass the costs of tariffs on to customers - manufacturers and consumers in the United States - by raising their prices.

U.S. business executives and economists say U.S. consumers foot much of the bill through rising prices. . .

https://www.reuters.com/article/us-u...-idUSKCN1SR1UI