- - Monday, June 3, 2019

ANALYSIS/OPINION:

President Trump is fond of tariffs, seeing them as both a means and an end. He’s fond of slapping them on other countries as a form of leverage to secure concessions on other issues. But the president obviously likes them in and of themselves, because they punish imports and promote domestic industry.

Since long before he contemplated a run for the presidency, he made it clear the wants more stuff made in America, and less stuff imported. Don’t we all? He laments a nation that has de-industrialized and traded middle-class factory jobs for cheap imports from the third world. America is a nation with Walmarts and Costcos bursting at the seams with goods and temptations and idle factory floors.

“June 10th,” the president tweeted last week, “the United States will impose a 5 percent Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed.” (Random capitalizations his.)

The tariffs on Mexico — which now, to be sure, are only threats — are designed to achieve a number of goals, as the president made clear in a follow-up succession of online messages. “People have been saying for years that we should talk to Mexico,” he said. “The problem is that Mexico is an ‘abuser’ of the United States, taking but never giving. It has been this way for decades. Either they stop the invasion of our Country by Drug Dealers, Cartels, Human Traffickers, Coyotes and Illegal Immigrants, which they can do very easily, or our many companies and jobs that have been foolishly allowed to move South of the Border, will be brought back into the United States through taxation (Tariffs). America has had enough!” The opening round, the 5 percent tariffs, is only an opening salvo, he has made clear, and higher levies of up to 25 percent will follow if Mexico does not get religion.

The president has a point that Mexico has done little to stem the crisis on America’s southern border, a crisis that shows no signs of abating. “In Texas, the government [just] recorded the largest single group of illegal immigrants in history, and also saw the first-ever large group of African children and families — suggesting that knowledge of the loopholes that Central Americans have been exploiting is knowledge now spreading beyond the Western Hemisphere,” this newspaper reported this week. With tens of thousands of migrants from Central America coming through Mexico to reach the United States, there must be more that the Mexican government could do, both to secure its own southern border with Guatemala and to better police its territory of migrants who are making their way through. The United States holds the whip hand; the United States is by far the most important export market for Mexico.



The Mexican response, after the first gasps of unbelief that an American president would be so blunt, is conciliatory. A delegation of relevant officials was dispatched Monday to Washington. Mr. Trump clearly got their attention.

The short-term problem with the president’s approach is that tariffs will for the foreseeable future harm American consumers. The United States imports large quantities of cars, car parts, machinery, fruit, beer, and appliances from Mexico, all of which would become more expensive as a result of the new tariffs. A way to redress this, as the president hinted, is for more cars, car parts, machinery, fruit, beer, and appliances to be produced here at home. But that can’t happen overnight. Given that about 70 percent of U.S. gross domestic product is comprised of domestic spending, the economy could slow and this would certainly hurt the president in the lead-up to the 2020 elections.

Mr. Trump is in what looks like the catbird seat now because of the extraordinarily strong economy and the perception that he puts America first. The trouble with the president’s tariff-first policy, however, is that sometimes the latter ends up undermining the former. The splendid economy is the best thing going for the president, and he had best be careful.

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