Trump threatens Mexico with auto tariff
President Donald Trump seems to think that if he can hurt Mexico enough with a new tariff, our neighbor to the south will cut off immigration from Central America. And he might be right, especially if he escalates the tariff beyond the 5% he pledges to apply Monday.
But if he does, the Fort Worth area, like all of Texas, is in line for some significant collateral damage.
Texas imports from Mexico topped $107 billion last year, according to the Census Bureau, and the DFW region does well more than $1 billion in total trade with Mexico each year.
So, Texans are on the hook for billions more when Trump’s tariffs are passed on to consumers. And that’s not even counting the pain that will come when Mexico inevitably retaliates and puts new tariffs on our exports. More than a third of Texas products shipped out of the state are sent south.
Dozens of large Texas companies do extensive business in Mexico, including American Airlines and BNSF Railway Co., both headquartered in Fort Worth. Those companies and their employees stand to suffer in a trade war with Mexico.
Trump is right that the migration crisis is reaching an extraordinary level and requires swift action. U.S. border protection officials said this week that more than 144,000 migrants were taken into custody along the border with Mexico in May, the third straight month the number has topped 100,000. For perspective, in May 2017, that number was less than 20,000. And many of the new arrivals are children.
Mexico has taken steps to try to help, such as cutting off humanitarian visas at its border with Guatemala and agreeing to house some asylum seekers until their cases can be heard. Trump argues that Mexico could do more — even cut off the flow of Central Americans entirely.
Perhaps, but economic sabotage is no way to persuade a friend and major economic partner. And it could easily backfire: If the tariffs reduce trade and that hurts the Mexican economy, that could push more Mexicans to try to come to the U.S., adding to the immigration mess. Mexico’s U.S. ambassador issued a subtle notice that without her country’s help, a quarter-million more immigrants could arrive at the U.S. border.
The threats are real enough that many of Trump’s fellow Republicans are urging the president to back off his call for tariffs. Some have even said that Congress might override the president’s action. While Texas Sens. John Cornyn and Ted Cruz haven’t committed to that, they’ve made clear how much the state will suffer under new tariffs.
Mixing trade policy and immigration is a diplomatic mess, particularly at a time when the U.S., Mexico and Canada are working to finalize an overall trade pact to replace NAFTA. The two neighbors are the biggest U.S. trading partners, and further conflict could badly disrupt the American economy.
Trump has warned that he’ll bump the tariff on Mexico by 5 percentage points each month if he’s unsatisfied with the country’s action on immigration. Texas needs a solution to the migrant surge, but not at the expense of having a dagger dangling over its economy for much of the year.
The president who prides himself on being a dealmaker should find better ways to persuade our neighbor to help with the immigration problem.