HOUSTON (FOX 26) - This week’s panel: Wayne Dolcefino – media consultant, Carmen Roe – Houston attorney, Bob Price – Associate Editor of Breitbart Texas, Mustafa Tameez – Democratic consultant and FOX 26 political contributor, Muchelle Byington – conservative attorney, Keir Murray – Democratic strategist discuss what impact President Trump's proposed tariffs will have on immigration and on U.S. consumers.
WASHINGTON (AP) - June1, 2019 President Donald Trump has once again turned to tariffs to try to get his way with a U.S. trading partner.
This time, the target is Mexico: Trump plans to impose 5% tariffs on Mexican imports starting June 10 and to ratchet them up to 25% by Oct. 1 if the Mexicans don't do more to stop the surge of Central American migrants across the southern U.S. border.
Tariffs have become one of Trump's favorite policy tools. The president, who calls himself "a Tariff Man," has slapped the levies on imported steel, aluminum, dishwashers and solar panels. He's also imposed them on $250 billion worth of Chinese goods in a dispute over China's aggressive campaign to challenge American technological dominance. And he's planning to extend tariffs to the $300 billion worth of Chinese imports that he hasn't already targeted.
Before Trump, tariffs had long been fading into history, a relic of the 19th and early 20th centuries when nations tended to focus on keeping imports out and exporting as much as they could.
More than any other modern president, Trump has embraced tariffs as a punitive tool - against Europe, Canada and other key trading partners but especially against China , the second-largest economy after the U.S.
Here's a look at what tariffs are and how they work.
Q: ARE WE IN A TRADE WAR?
Economists have no set definition of a trade war. But with the world's two largest economies now slapping potentially punishing tariffs on each other, it looks as if a trade war has arrived. All told, Trump has threatened to hit as much as $550 billion worth of China's exports to the U.S. with punitive tariffs. That's more than the $506 billion in goods that China shipped to the United States last year.
It's not uncommon for countries - even close allies - to fight over trade in specific products. The United States and Canada, for example, have squabbled for decades over softwood lumber.
But the U.S. and China are fighting over much broader issues, like China's requirements that American companies share advanced technology to access China's market, and the overall U.S. trade deficit with China. So far, neither side has shown any sign of bending.
Q: SO WHAT ARE TARIFFS?
Tariffs are a tax on imports. They're typically charged as a percentage of the transaction price that a buyer pays a foreign seller.
In the United States, tariffs - also called duties or levies - are collected by Customs and Border Protection agents at 328 ports of entry across the country. Proceeds go to the Treasury. The tariff rates are published by the U.S. International Trade Commission in the Harmonized Tariff Schedule, which lists U.S. tariffs on everything from dried plantains (1.4 percent) to parachutes (3 percent).
Sometimes, the U.S. will impose additional duties on foreign imports that it determines are being sold at unfairly low prices or are being supported by foreign government subsidies.
Q: DO OTHER COUNTRIES HAVE HIGHER TARIFFS THAN THE UNITED STATES?
Most key U.S. trading partners do not have significantly higher average tariffs. According to an analysis by Greg Daco at Oxford Economics, U.S. tariffs on imported goods, adjusted for trade volumes, average 2.4 percent, above Japan's 2 percent and just below the 3 percent for the European Union and 3.1 percent for Canada.
The comparable figures for Mexico and China are higher: Both have higher duties that top 4 percent.
Trump has complained about the 270 percent duty that Canada imposes on dairy products. But the United States has its own ultra-high tariffs - 168 percent on peanuts and 350 percent on tobacco.
Q: WHAT ARE TARIFFS SUPPOSED TO ACCOMPLISH?
Two things: Raise government revenue and protect domestic industries from foreign competition. Before the establishment of the federal income tax in 1913, tariffs were a big money raiser for the U.S. government. From 1790 to 1860, for example, they produced 90 percent of federal revenue, according to "Clashing Over Commerce: A History of US Trade Policy" by Douglas Irwin, an economist at Dartmouth College. By contrast, last year tariffs accounted for only about 1 percent of federal revenue.
In the fiscal year that ended last Sept. 30, the U.S. government collected $34.6 billion in customs duties and fees. The White House Office of Management and Budget expects tariffs to fetch $40.4 billion this year.
Tariffs also are meant to increase the price of imports or to punish foreign countries for committing unfair trade practices, like subsidizing their exporters and dumping their products at unfairly low prices. Tariffs discourage imports by making them more expensive. They also reduce competitive pressure on domestic competitors and can allow them to raise prices.
Tariffs fell out of favor as global trade expanded after World War II.
The formation of the World Trade Organization and the advent of trade deals like the North American Free Trade Agreement among the U.S., Mexico and Canada reduced tariffs or eliminated them altogether.
Q: WHY ARE TARIFFS MAKING A COMEBACK?
After years of trade agreements that bound the countries of the world more closely and erased restrictions on trade, a populist backlash has grown against globalization. This was evident in Trump's 2016 election and the British vote that year to leave the European Union - both surprise setbacks for the free-trade establishment.
Critics note that big corporations in rich countries exploited looser rules to move factories to China and other low-wage countries, then shipped goods back to their wealthy home countries while paying low tariffs or none at all. Since China joined the WTO in 2001, the United States has shed 3.1 million factory jobs, though many economists attribute much of that loss not just to trade but to robots and other technologies that replace human workers.
Trump campaigned on a pledge to rewrite trade agreements and crack down on China, Mexico and other countries. He blames what he calls their abusive trade policies for America's persistent trade deficits - $566 billion last year. Most economists, by contrast, say the deficit simply reflects the reality that the United States spends more than it saves. By imposing tariffs, he is beginning to turn his hard-line campaign rhetoric into action.
Q: ARE TARIFFS A WISE POLICY?
Most economists - Trump's trade adviser Peter Navarro is a notable exception - say no. The tariffs drive up the cost of imports. And by reducing competitive pressure, they give U.S. producers leeway to raise their prices, too. That's good for those producers - but bad for almost everyone else.
Rising costs especially hurt consumers and companies that rely on imported components. Some U.S. companies that buy steel are complaining that Trump's tariffs put them at a competitive disadvantage. Their foreign rivals can buy steel more cheaply and offer their products at lower prices.
More broadly, economists say trade restrictions make the economy less efficient. Facing less competition from abroad, domestic companies lose the incentive to increase efficiency or to focus on what they do best.
WASHINGTON (AP) - May 31, 2019 Exasperated by reports of a flood of illegal border crossings, President Donald Trump summoned his top immigration advisers to demand action. Responding to his mounting concern, including his extreme threats to entirely close the U.S.-Mexico border, they prepared an alternative but still-inflammatory plan to levy escalating tariffs on all Mexican imports to the United States.
Thursday night's surprise announcement of the plan by Trump, threatening to upend ratification chances for his own revised North American free trade pact, demonstrated the lengths to which the risk-taking president is willing to go to crack down on illegal immigration, even in the face of bipartisan criticism, legal challenges and polarized public feelings.
He's setting the tricky politics of immigration and trade - the two issues that defined his candidacy and bedevil his presidency - on a collision course and injecting new tensions into his relations with political allies as he struggles to show results in his campaign for a second term.
"Mexico has taken advantage of the United States for decades," Trump declared anew in a tweet on Friday. That was the morning after he announced the 5% tariff would kick in on June 10 - and increase monthly to 25% "until the Illegal Immigration problem is remedied."
"Because of the Dems, our Immigration Laws are BAD. Mexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem. Time for them to finally do what must be done!" he said.
Debate over solutions aside, indicators at the border have indeed been getting worse. For May, officials said Thursday, apprehensions are expected to hit their highest level in more than a dozen years and "significantly surpass the record 109,000 in April," said acting Homeland Security Secretary Kevin McAleenan.
On Wednesday, a group of 1,036 - including families and unaccompanied children - was appended after crossing from Juárez. That was the largest group ever apprehended at the border.
Nonetheless, Trump's tariff prescription for the problem was instantly panned across the political spectrum . Republican Sen. Chuck Grassley of Iowa, a usual Trump ally and the chairman of the Senate Finance Committee, said it was a "misuse of presidential tariff authority" that would burden American consumers and "seriously jeopardize passage" of the U.S.-Mexico-Canada pact to modify the North American Free Trade Agreement.
"Imposing tariffs on goods from Mexico is exactly the wrong move," said Neil Bradley, executive vice president of the U.S. Chamber of Commerce , the establishment lobbying giant that now is exploring legal action to block the tariffs.
"These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border," Bradley said, imploring Congress and the president to work together to address border problems.
To both allies and critics, the tariff escalation marks the latest manifestation of Trump's increasing reliance on instinct and his aides' increasing unwillingness or inability to constrain an impulsive leader. Many of the people who had once talked Trump out of going through with his most radical ideas, such as completely shutting down the southern border or renewing the controversial immigrant child separation policy, have been pushed out of the administration, including former Homeland Security Secretary Kirstjen Nielsen.
The tariff announcement was made with a striking amount of secrecy for the leak-prone Trump administration, with barely two dozen officials in the West Wing aware of what was to transpire. Trade Representative Bob Lighthizer and other officials with trade portfolios were not included in the final discussions Thursday and privately expressed opposition to the move, according to three people familiar with the matter who spoke only on the condition of anonymity.
Trump is mindful that many of his efforts to clamp down on illegal immigration have been stymied by courts or Congress, and that his promise to build a border wall will be far from fulfilled by the time voters decide his political fate next year. With his campaign depending on even more of his hard-core supporters turning out in 2020 than in 2016, Trump's team is worried that the spike in crossings could prove to be a political headache with his base.
But in aiming for progress on that front, Trump is now throwing into the wager another campaign promise: approval of his renegotiated North American trade pact.
Sandwiched between two presidential foreign trips, and with senior adviser and Mexico liaison Jared Kushner out of the country, the tariff announcement caught many in the White House and on Capitol Hill unawares. Press secretary Sarah Sanders insisted that the White House had briefed key lawmakers and allies on the plan before it was announced, though some complained they found out only at the last moment, with no time to provide feedback.
While the announcement was a surprise, Trump's ire over a sharp increase in southern border crossings and his demand for increasingly drastic action were not. Trump attorneys, including White House Counsel Pat Cipollone, had been studying how to fulfill the president's wish for weeks and settled on the tariff plan as a more legally-sound move than Trump's push to close the border.
White House officials assert that the tariff announcement was a negotiating tool, designed to get Mexico to act. And, perhaps seeking to calm anxious markets, they suggest the taxes might never take effect.
"We fully believe they have the ability to stop people coming in from their southern border and if they're able to do that, these tariffs will either not go into place or will be removed after they go into place," said acting White House chief of staff Mick Mulvaney.
Asked what Mexico can do to avoid the levies, press secretary Sanders said a good start would be for Mexico to send home Central American migrants crossing through their country to get into the United States.
"They can return them back home," she said. "They can stop these massive caravans from coming through their country into ours. That would be a very big first step."