Republican Senator Charles Grassley, who chairs the Senate Finance Committee expressed total disapproval of president Donald Trump’s latest tariff action directed against Mexico. Branding the new tariff imposition as a presidential misuse of tariff authority, the GOP senator warned that such action will likely jeopardize the ratification of the United States-Mexico-Canada Agreement (USMCA).
Trump’s latest Mexico tariff scheme starts on June 10, 2019 at 5%, to increase at 10%, 15%, 20%, and to a final 25% between July and October, 2019. The U.S. president sees the new Mexico importation tariff as a way of pressuring the Mexican government to take action in preventing the influx of immigrants reaching the U.S. – Mexico border. All goods imported from Mexico will then be subject to the current tariff rate, until such time that Mexico has resolved the immigration dispute with the U.S.
Republican Senators from Key States Also Expressed Disapproval
Republican Senator Joni Ernst of Iowa is likewise concerned that if Trump pushes through with the implementation of the Mexico importation tariff, progress toward the finalization and ratification of the USMCA will be stifled. Senator Ernst considers the new trade agreement as vital to the agricultural communities, at a time when farmers need it most. As it is, the agriculture sector has been suffering from the effects of the ongoing trade war between the U.S. and China.
Republican Senator Robert Portman also aired similar concerns, being a former trade representative himself. He expressed support on moving forward with solutions aimed at solving the border immigration crisis, but not if that solution will hurt the country’s economy and put at risk an important goal.
Texas Republican Senator John Cornyn, voiced a similar stance, whilst urging Donald Trump to reconsider pushing through with his Mexico import tariff scheme. Through a spokesperson, Senator Cornyn expressed concerns that such tariffs will hurt Texas disproportionately.
How Trump’s Latest Tariff Action Puts the USMCA at Risk
The USMCA is regarded by many as one that will create better balance and reciprocity of trade between U.S., Mexico and Canada. If ratified, a new free-trade agreement will ensure better-paying jobs for Americans, as well as support economic growth in North America. Once finalized and implemented, the USMCA replaces the North American Free Trade Agreement (NAFTA.)
Negotiations under the USMCA requires Trump as president, to follow the consultation and negotiation guidelines established by the U.S. Congress, whose authority to do so is stipulated under the “Trade Promotion Authority (TPA) Laws.”
Ratification of the USMCA follows only after Congress has determined that TPA procedures have been completed. After which, the agreement undergoes Congressional voting to decide on implementing a new bill adopting the USMCA as the trade agreement currently in effect. Until such time that the TPA procedures have been satisfied, including obtaining Congressional approval, the NAFTA remains in place.
Currently, major business organizations, councils and trade groups, including the U.S. Chamber of Commerce are now evaluating legal actions to take in case Donald Trump does not back down on his plan to impose the controversial Mexico import tariffs. They all agree that increased tariffs on imported goods, even if initially going to government coffers, will eventually be passed on as additional burden to consumers. Some even consider the tariff move as destabilizing and dangerous.