Speed Reads

Trade Wars

GOP Senate Finance Committee chair warns Trump's Mexico tariffs imperil his 'big victory' on the NAFTA reboot

Financial markets were not pleased with President Trump's announcement Thursday that he will impose new, gradually increasing tariffs on all Mexican imports "until such time as illegal migrants coming through Mexico, and into our country, STOP." Plenty of conservatives were unhappy, too. The Heritage Foundation's James Carafano and Jack Spencer, for example, said the tariffs are "the wrong policy" to address the border "crisis" and would "punish our citizens." Phillip Klein at The Washington Examiner called it "mindbogglingly stupid on so many levels."

White House Chief of Staff Mick Mulvaney said Trump is imposing the tariffs, starting at 5 percent and rising to 25 percent, under the International Emergency Economic Powers Act, which gives presidents authority to regulate commerce during a national emergency. Republican leaders in the House and Senate were largely supportive of the tariffs, he added.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) was not supportive. "Trade policy and border security are separate issues," he said in a statement. "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."

The White House has just started the process toward possible ratification of the U.S.-Mexico-Canada Agreement (USMCA), an update to NAFTA, earlier Thursday, and ratification is uncertain in the House. At the Examiner, Klein agreed that slapping tariffs on Mexican goods will "surely disrupt" the USMCA ratification process, and he listed four other objections, including that the tariffs amount to "a tax increase of up to 25 percent on American families and businesses purchasing any products from Mexico, one of the U.S.'s leading trade partners."

"Congress should immediately intercede to block this reckless policy by reclaiming its traditional power over tariffs," Klein concludes. "House Democrats should pass something and force Senate Republicans to either rebuke Trump's policy, or answer for their cowardice." Grassley?