5 Ways Trump’s New Plan to Seal the Border by Putting Tariffs on Mexico Could Backfire

Keep truckin’? Photo: Omar Martínez/picture alliance via Getty Images

Donald Trump has a problem. The president’s defining issue is border security and curtailing illegal immigration. But adverse conditions in Central America’s Northern Triangle are sending tens of thousands of asylum seekers to the United States each month. And once these migrants reach U.S. soil — even if they do so by crossing the border illegally — they are entitled to make an asylum claim, which typically takes months, if not years, to fully adjudicate.

The Trump administration does not have enough trust for these asylum seekers to release them into the country while they await their day in court — but it does not have enough cages for them, either.

The president would like to solve this problem by either changing asylum law or ignoring it. But a divided Congress isn’t about to reach the “grand bargain” on immigration that has eluded it for decades on the eve of a presidential election. And Trump has yet to install enough lackeys in the judiciary to completely nullify existing federal statutes.

Thus, the administration has turned its focus to coercing Mexico into solving the United States’ border crisis for it. Specifically, the White House has lobbied the government of Mexican president Andrés Manuel López Obrador (a.k.a. AMLO) to ramp up security on Mexico’s border with Guatemala, crack down on international organizations that aid Central American migration to the U.S., and to allow those seeking asylum in the U.S. to stay on the Mexican side of the border while they await their hearings.

The Mexican government has offered a degree of cooperation on all of these fronts. But even with this help, in May, border crossings into the U.S. hit a 12-year high. So now, the Trump administration is pressing a more sweeping demand: It wants Mexico to declare itself a safe harbor for Central Americans fleeing the Northern Triangle, in what is known as “a safe third country” agreement. This would mean that Central American migrants who travel to the U.S. southern border would no longer be entitled to asylum hearings in the United States, as they would have already secured the right to seek asylum in Mexico, a safe country.

The Mexican government does not wish to sign such an agreement for a variety of reasons. Some of these are self-interested: The mass migration of Central American asylum seekers isn’t much less controversial with the Mexican public than it is with America’s. But Mexico’s most compelling objection is rooted in the facts of the matter: Given Mexico’s own problems with gang violence and police corruption, it is far from clear that Central American asylum seekers are safe in Mexico.

Now, a White House that did not consider America’s (exceptionally law-abiding and nonviolent) undocumented population to be a top-tier national security threat would have less difficulty solving the migrant “problem.” For example, ankle bracelets are a cheap and largely effective means of ensuring that asylum seekers do not abscond into the country while they await their hearings as free residents of the U.S. Further, an administration that was willing to trade a pathway to citizenship for America’s longtime undocumented residents, in exchange for reforms to aslyum law, would likely be able to get a significant number of congressional Democrats onboard. Alas, given the president’s commitment to halting America’s “ceaseless importation of third-world foreigners,” the crisis at the border is a genuinely difficult one for him to solve.

But his new “solution” is inexcusably imbecilic nonetheless.

On Thursday, Trump announced that he is imposing a 5 percent tax on all Mexican imports to the United States — an across-the-board tariff that will steadily rise “until such time as illegal migrants coming through Mexico, and into our Country, STOP.” Of course, it is essentially impossible for AMLO’s government to prevent any human beings from crossing into the U.S. at any point along its 2,000-mile border with Mexico. So, it is not entirely clear what the Mexican government is actually supposed to do to secure relief from the tariffs. But in a press briefing Thursday, DHS Secretary Kevin McAleenan and acting White House chief of staff Mick Mulvaney suggested that AMLO’s signature on a safe third-country agreement might do the trick.

Regardless, Trump’s bid to solve the so-called border crisis — by engineering a spike in the (already exorbitant) price of avocado toast in the U.S. — is an extremely bad idea that’s likely to undermine the president’s own trade agenda, jeopardize his reelection prospects, and reduce Mexican cooperation on matters of immigration.

Here’s a quick rundown of five distinct ways Trump’s tariffs on Mexico could backfire.

1. They could prevent Trump from winning approval of his new version of NAFTA before the 2020 election.

Hours before announcing across-the-board tariffs on Mexico Thursday, the Trump administration signaled that it intends to send its uncreatively named United States–Mexico–Canada Agreement (USMCA) to Congress as soon as next month. House Democrats have said that they will block the USMCA’s passage unless the White House gets the Mexican government to embrace stronger enforcement mechanisms for the agreement’s provisions on labor standards. That was going to be a tall order under any circumstances. In a context where the U.S. has just demonstrated that its commitments in trade agreements are effectively meaningless — as it feels entitled to unilaterally impose tariffs at any time, by invoking the International Emergency Economic Powers Act — winning such concessions from AMLO would seem all but impossible.

Or so the Republican chairman of the Senate Finance Committee seems to believe. “Trade policy and border security are separate issues,” Chuck Grassley told Politico Thursday evening. “This is a misuse of presidential tariff authority and counter to congressional intent. Following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump’s and what could be a big victory for the country.”

2. The tariffs could actually hurt American exporters.

During Thursday’s press call, Mick Mulvaney assured reporters that the new tariffs would not affect the ratification of the USMCA since “these are not tariffs as part of a trade dispute, these are tariffs as part of an immigration matter.”

But Trump has a harder time keeping these issues separate than his chief of staff does. In Mulvaney’s telling, tariffs on Mexico are a lamentable necessity for solving an immigration emergency. But for Trump, the reason that tariffs are such a good bargaining chip is that they are actually good for the U.S., in and of themselves. As the president made clear in a Friday morning tweet:

But Trump’s tariffs are not going to revive American manufacturing or put any significant dent in the trade deficit. In fact, as Vox’s Matt Yglesias explains, the policy could actually make many U.S. exporters less competitive.

[T]he US and Mexico both have currencies that float freely on international financial markets, and one immediate consequence of the tariff announcement was a rapid fall in the value of the Mexican peso. This will partially offset the increased prices to American consumers, but will also make US exports less affordable to Mexican consumers — meaning that American exporters of goods to Mexico (advanced machinery is the biggest category here) will pay a healthy share of the price for the new policy.

3. Trump could end up squandering his top political asset.

Donald Trump is a historically unpopular president who polls very poorly against hypothetical Democratic 2020 challengers, “generic” and otherwise. But a majority of Americans do approve of his handling of the economy. Thus, if the president can keep the unemployment rate at half-century lows, and consumer confidence exceptionally high, he’ll have a solid chance of eking out another Electoral College victory.

Before Trump’s announcement of new tariffs on Mexico, the bond market was already flashing warning signs that the good times may be coming to a close. Meanwhile, the president’s impending hike in tariffs on China were already threatening to shave up to one point off of GDP. Now, Trump has given anxious investors another cause for panic. If his administration actually allowed tariffs on all Mexican imports to climb to 25 percent by October — as he has threatened to do — commerce on the North American continent would be severely burdened, and economic growth depressed.

From a purely electoral perspective, the last thing Trump should be doing right now is increasing the probability of the U.S. economy entering recession before November 3, 2020. But his new tariffs would seem to do precisely this.

4. The United States just demonstrated that its allies cannot trust it to honor the terms of trade deals — so why would China?

Trump is set to meet with Chinese leader Xi Jinping at the G20 summit next month. This looked like the president’s best opportunity to reach a peace agreement in his trade war with Beijing, before the conflict spirals out of control and American companies lose access to China’s rare earth metals.

But Trump’s decision to grossly violate the spirit of his freshly inked trade agreement with Mexico makes such a compromise less likely. As CNBC reports:

“Trump’s readiness to hit a trading partner with new tariff threats soon after striking a trade deal will make China still more cautious about signing up to a deal that Trump then reneges upon, humiliating its leadership,” Krishna Guha. policy strategy analyst at Evercore, said in a note. “Beijing will remain open to talking, but this cannot help prospects for an early breakthrough at G20.”


… “How can you trust Trump to honor a deal?” Chris Krueger, Washington strategist at Cowen said. “Mexico submitted USMCA this week for ratification … Trump’s signature trade achievement was moving downfield … and he just threatened Mexico … with unilateral tariffs on ALL Mexican goods exports to the U.S.”

5. AMLO may now be less inclined to help the U.S. with its asylum “problem.”

As North America’s hegemon, the United States has plenty of ways to incentivize Mexico to cooperate with its aims. And through relatively quiet diplomacy and arm-twisting, the Trump administration gained a significant degree of cooperation from AMLO’s government on various measures designed to stem the northward flow of migrants.

But Mexico is a democracy (however flawed). And AMLO is accountable to an electorate that is understandably averse to seeing its leaders publicly bullied and brought low by the U.S. government. For this reason, by choosing to coerce Mexico in public with a big stick instead of cajoling it in private with carrots, Trump has quite plausibly made it less tenable for López Obrador to give him what he wants.

AMLO came close to suggesting as much in his letter to Trump Thursday, in which he wrote, “please remember, that I do not lack the courage, that I do not act cowardly or timidly but on principles: I believe in politics that, among other things, were meant to avoid confrontation and war … Nothing by force, everything by reason and Law!”

All this said, it’s possible that Trump has a clear path to victory on this issue. After all, since he hasn’t officially made any concrete demands, he shouldn’t have much trouble framing any nominal concession from the Mexican government as a triumph. Further, as immigration reporter Dara Lind notes, border crossings almost always spike in the spring before dipping in the summer. So it’s quite possible that the president will be able to point to tangible improvements in conditions at the border when declaring mission accomplished a few weeks from now.

But while this will be sufficient to validate Trump’s deal-making skills to his base, Fox News segment producers can’t actually protect the president from the diplomatic and economic consequences of using trade policy as a kind of stress ball.

5 Ways Trump’s New Tariffs on Mexico Could Backfire