[CTC] US, Mexico fail to reach deal on tariffs

[Arthur Stamoulis]

Two articles below...

https://thehill.com/homenews/administration/447195-us-mexico-fail-to-reach-deal-on-tariffs-reports <https://thehill.com/homenews/administration/447195-us-mexico-fail-to-reach-deal-on-tariffs-reports>

US, Mexico fail to reach deal on tariffs

By Jordan Fabian
 06/05/2019
 
President Trump <https://thehill.com/people/donald-trump> said Wednesday that “not nearly enough” progress was made in negotiations with Mexican officials over curbing illegal migration, adding the U.S. plans to go ahead with punitive tariffs starting Monday.

The talks at the White House were a part of a last-ditch effort by Mexico to avert the tariffs, which are set to begin at 5 percent and could increase to 25 percent by October if the Trump administration deems Mexico has not done enough to crack down on migration and criminal gangs. Trump said the talks would resume on Thursday.

“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule. The higher the Tariffs go, the higher the number of companies that will move back to the USA!” the president tweeted.

Trump said the discussions yielded progress on key issues, “but not nearly enough,” citing a report the Department of Homeland Security released earlier on Wednesday saying that border arrests in May had hit 133,000—a total not reached in more than a decade.

The results appeared to have been released on Wednesday to put added pressure on Mexico.

Vice President Pence led the U.S. delegation in place of Trump, who is in Europe. Mexican Foreign Secretary Marcelo Ebrard and other top officials huddled with their counterparts in the Roosevelt Room for roughly 90 minutes, according to the White House.

Secretary of State Mike Pompeo <https://thehill.com/people/mike-pompeo> and acting Homeland Security Secretary Kevin McAleenan also joined the meeting. Ebrard continued discussions with Pompeo afterward at the State Department.

Ebrard said in a press conference afterwards that both delegations acknowledged more needed to be done to stem the flow of migrants to the U.S., which is mostly coming from Central America.

“Both sides recognized that the current situation cannot be maintained as it is,” said Ebrard, alluding to May's border crossing numbers.

Trump, speaking earlier Wednesday, expressed confidence that Mexico wants to reach a deal to avoid tariffs but said it must demonstrate it is able to “stop” illegal migration, a goal that has not been achieved in recent history.

“Mexico can stop it. They have to stop it. Otherwise, we just won’t be able to do business. It’s a very simple thing,” the president told reporters while in Ireland.

“And I think they will stop it. I think they want to do something. I think they want to make a deal. And they sent their top people to try,” he added.

The White House has been vague about what Mexico must do to avoid the tariffs, much to the chagrin of Mexican officials and lawmakers on Capitol Hill who oppose the duties.

White House trade adviser Peter Navarro, who has pushed for the tariffs, said earlier Wednesday they might not need to take effect at all.

“We believe that these tariffs may not have to go into effect precisely because we have the Mexicans' attention,” Navarro said on CNN <https://thehill.com/homenews/administration/447070-mexican-officials-to-meet-with-pence-in-last-ditch-effort-to-avert?rnd=1559777644>.

U.S. officials have pressured Mexico to increase security on its southern border with Guatemala, a key crossing point for migrants, increase intelligence sharing in the fight against gangs and reach a new agreement with the administration on asylum seekers, who make up a large number of the people crossing the U.S. southern border.

Trump last Thursday announced <https://thehill.com/latino/446269-trump-announces-5-percent-tariff-on-imports-from-mexico-starting-june-10> his plan to impose a 5 percent tariff on all Mexican goods amid mounting frustration over his administration’s inability to stem what it has called a migration “crisis.”

The tariff will increase by 5 percentage points each month until Mexico does enough to satisfy Trump’s demands.

The decision was made over the objection <https://thehill.com/policy/finance/446423-trumps-mexican-tariffs-expose-administration-rifts> of some of his aides, who warned it could hurt the U.S. economy and stall congressional approval of Trump’s revision of the North American Free Trade Agreement.

Mexico recently became the U.S.’s top trading partner. The U.S. imported $346.5 billion in goods from Mexico last year, according to the U.S. trade representative

=====

Politico Morning Trade

U.S. AND MEXICO KEEP TALKING: U.S. and Mexican officials will meet again today  <http://go.politicoemail.com/?qs=d3e2d4a1a683dad201061dc3b21dc4dec2a777727400e753a94281d84c70fb3cd3719a0cb10a846e4b419f69082b7165>to hammer out a potential solution to President Donald Trump's demands on immigration. Vice President Mike Pence and Mexican Foreign Minister Marcelo Ebrard and other senior officials met for 90 minutes in the White House on Wednesday, but the talks focused mainly on what the U.S. wants Mexico to do on migrants rather than the looming tariffs that will go into effect Monday.

"Progress is being made, but not nearly enough!" Trump tweeted Wednesday evening.

In a post-meeting press conference, Ebrard said the two sides had "focused on migration flows and what Mexico is doing and proposing to the United States." He also signaled that Mexico agrees with Trump's concern that too many migrants were coming over the border: "It can't be maintained how it is."

No talk of tariffs: Ebrard told reporters he didn't want to discuss the possibility of Mexico's retaliation to U.S. tariffs since the two sides are now involved in negotiations. He said Pence was focused on finding common ground.

However, he made clear that while the U.S. may be looking for a solution with a short-term and immediate effect, Mexico wants a long-term solution. It wasn't reasonable to expect the whole issue would be resolved in one meeting, he said.

Importers gird for customs chaos: Customs brokers warned there has not been nearly enough time for them to prepare for a tariff increase. Industry leaders wrote <http://go.politicoemail.com/?qs=d3e2d4a1a683dad25ddbdac2d5083b2b773fdfa940ff3d2d59c513c24e86074e555015a8111ff0ce21b34618a4160d58> administration officials Wednesday urging them to delay the new import duties until U.S. Customs and Border Protection "can develop the procedures by which importers and brokers and reasonably pay them."

"It is our responsibility as the most knowledgeable professionals, to express our grave concern, even alarm, that it will be impossible to comply, as the mechanisms for compliance are not available between now and June 10, or even before the increase planned for July 1," the Pacific Coast Council of Customs Brokers & Freight Forwarders Association wrote in a letter.

House, Senate GOP split on tariffs <http://go.politicoemail.com/?qs=d3e2d4a1a683dad25357bab1aa1486d3af7a7631b589afb849162f10406923a139d9dd680241dc63e9302da8300cc3fa>: Meanwhile, Trump's potential tariffs on Mexico are deepening divisions among GOP lawmakers who have struggled with the president's trade strategy since he withdrew the U.S. from the Trans-Pacific Partnership on this third day in office. 

Congressional Republicans are not coordinating a unified message about the consequences if Trump moves forward with the plan. Even if the Senate is able to muster 67 votes to override a presidential veto, they couldn't stop the tariffs if House Republicans are working in the opposite direction.

"There would be a few [Republicans voting against the president], but nowhere near the 55 threshold," said Freedom Caucus Chairman Mark Meadows <http://go.politicoemail.com/?qs=d3e2d4a1a683dad204d6c4a3b6b39af8794ce478d650e28d19f7377cf501a7dadecfdd2647662a693ae8c8dd432915ab> (R-N.C.), one of Trump's top allies on Capitol Hill. 

USTR'S ENFORCEMENT VISION:  <http://go.politicoemail.com/?qs=d3e2d4a1a683dad2682d67e925467d26f75e59d97a66d199d3d79786c3b5915d0dd509777e7da8f2347e3b877c3635c2>The upshot from the draft statement of administrative action <http://go.politicoemail.com/?qs=d3e2d4a1a683dad2b31e6d3b21dc7efaaf3e55781a0234a3759c524e955585aedc7a1777a55bb194b051e1b9e842672f> on the new NAFTA is that the administration views Section 301 as a tool for addressing any range of trade problems. The document says the legal authority used to hit China with tariffs on $250 billion worth of goods will be effective in making sure Canada and Mexico live up to their commitments. If either country blocks a dispute panel from moving forward? Use 301. If the U.S. loses a dispute challenging Mexico's labor or environmental compliance? Use 301.

The draft document affirms a proposal <http://go.politicoemail.com/?qs=d3e2d4a1a683dad287bf84c9ed35e60b2c62606ec43804a6539a7d001895b6e2515d9a342ddff7a1b341134c685599d7> Lighthizer presented to lawmakers earlier this year, but the idea of falling back on Section 301 was received with skepticism. House Ways and Means Trade Subcommittee Chairman Earl Blumenauer (D-Ore.) has said <http://go.politicoemail.com/?qs=d3e2d4a1a683dad26c632f2e663364fa5e8bf8536e94af5a12d1c3c8b9fcb6bfa8f42567d2e424ff808456600afdecc7> "strong enforcement provisions must be baked into our trade agreements." 

'For discussion': The administration gave a nod to Democratic concerns with the pact's labor, environment and pharmaceutical provisions. It said it would "continue to work with Congress on potential changes to U.S. law" that would be necessary to ensure adequate monitoring and enforcement of labor and environmental obligations.

The administration also said it would "continue consultations" on potentially changing a 2015 customs law that increased the de minimis level, which sets the value at which a shipment will be subject to customs duties and taxes. Senate Finance leaders have already urged <http://go.politicoemail.com/?qs=d3e2d4a1a683dad2d9c52ca63098e1b33b5d780175fa69820b1d64f167642837432fec1a6dabe2234af7a1cd92b87e6b>Lighthizer to abandon his effort to lower the de minimis level through USMCA implementation.



Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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