US-Mexico Trade Dispute Stokes Volatility Concerns

Agreement to Avoid Tariffs Raises New Political Issues for 2020 Elections

American attention over the past two weeks has turned to President Trump’s dramatic move to impose tariffs on Mexican imports if the tide of migrants crossing the U.S.’s southern border continues. After nine days of anxious negotiations, an accommodation appears to have been reached, but one that raises new political issues for the 2020 elections.


On May 30, U.S. President Trump threatened over twitter to impose a rolling series of tariffs on goods imported from Mexico: “On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied.”

The abruptness of the announcement incurred an unusual degree of opposition from many in the GOP Senate caucus. In a private lunch with administration officials, half a dozen Republican Senators voiced strenuous objection to imposing tariffs on Mexican imports. Senator Ted Cruz of Texas reportedly told the President’s representatives that “I want you to take a message back” to the White House that “you didn’t hear a single yes” from the Republican conference. For his part, Republican Senator Roy Blunt of Missouri said, "we've been pretty clear on that topic. The president thinks that we've been very clear and that we don't know what we are talking about."

On the Democratic side, opposition to the President’s policy was strong. Democratic Senator of New York Chuck Schumer criticized the President’s gambit as “a bogus threat to impose tariffs, which the business community and Republicans in Congress rejected. And now the president claims a bogus agreement with Mexico which contains policies that Mexico volunteered to do months ago. Bogus, bogus, bogus.”


As suddenly as the dispute emerged, it appeared to conclude. On June 7, Trump announced over Twitter, “I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended.” The White House vigorously contested initial reports that the deal would consist of actions to which Mexico had already consented in prior negotiations.

At a press conference on June 11, President Trump waived a one-page document in front of the White House press corps, claiming it contained the text of new concessions from the Mexican government. Although initially mocked by his opponents, subsequent examination of an image of the document appeared to confirm the President’s claim.  


Both American and Mexican officials have indicated that the crisis is likely to erupt anew. Mexican Foreign Secretary Marcelo Ebrard said his government would consider a regional asylum agreement if the tide of migrants continued unabated. “We trust that the measures we have proposed will be successful,” he said. “But if they’re not, we’re going to have to participate in this kind of discussion.”

GOP Senators effectively concurred. Joni Ernst of Iowa noted that “if Mexico does not step up, I think the president will come back to it,” while Kevin Cramer of North Dakota said he was “certain” that President Trump would threaten to impose tariffs again: “It’s always on the table with him as a strategy and when it works, it’s great.”

Subscribe to the discussion