President Donald Trump’s intention to slap tariffs on imports from Mexico starting Monday will primarily hurt Americans, say many experts in economics, political science, and diplomacy.
Trump announced last week he would impose a growing set of tariffs on Mexico to force that country to stem the flow of Central American migrants and asylum seekers trying to enter the U.S. If levied, the tariffs begin on Monday at 5 percent, and increase by 5 percent every month until they total 25 percent — or until Trump is satisfied with Mexico’s border efforts.
At question is an international policy of “country of first asylum,” which says the first country a refugee reaches should be the one to process the asylum request. “For refugees in Central America, Guatemala in particular, it would be Mexico,” said John Caulfield, a retired diplomat with extensive experience in Latin America and now a consultant.
Addressing country of first asylum is “very complicated and technical,” Caulfield said, noting that it is best done through negotiation and planning with other governments.
However, Trump has decided to “punish a country with tariffs to the point that they will change internal policies without any understanding of who bears the burden of the policies,” said Anson Soderberry, a professor of economics at Purdue University who specializes in international trade.
Soderberry refers specifically to the economic trade terms of passthrough and burdens, which delineate where the imposition of the tariffs actually lands and who pays them. Tariffs are a form of consumption tax, like a national sales tax, only on specific goods from particular countries.
In 2018, the U.S. imported $346.5 billion in goods from Mexico, according to the Office of the U.S. Trade Representative. At even 5 percent, that would be a tax of $17.3 billion. Unless manufacturers in Mexico decide to absorb the costs themselves — which has virtually no chance of happening — the impact will be split among importers, wholesalers, retailers, and consumers, with the burden significantly if not entirely passed on to the latter.
With a tariff of 25 percent, a number that could be seen by October, the tax would be $86.5 billion annually, or $264.36 for every woman, man, and child in the U.S. The impact would be felt most heavily on goods like cars. A $40,000 auto would see a $1,500 price jump with a 5 percent tariff, or $7,500 at 25 percent.
The impact could extend beyond consumer prices and negatively affect jobs. Under NAFTA, a number of industries in the U.S. extend north and south into Canada and Mexico, with work on products split up and parts going back and forth, sometimes multiple times, for different stages of assembly.
“These minor adjustments to supply chain and production are potentially not that distortive,” Soderberry said. “But if it gets to the point that you have to make a big shift and move a plant, then what do you do? Then it can be 10,000 jobs that are lost. That’s a pretty big effect.”
The potential costs in money, jobs, and businesses are immense. So how effective is the tariff strategy? “The current administration seems to believe that tariffs are an all-purpose stick that can be used to beat countries with,” said Douglas Nelson, a professor of economics at Tulane University and an expert in trade. “There’s no obvious direct connection between tariffs and immigration. If those are your goals, there are many more efficient ways of going about those goals.”
“Usually when countries use tariffs, it’s to protect their domestic goods,” said Christina Fattore, associate professor of political science at West Virginia University. Instead, the goal is domestic politics and the 2020 presidential election, with immigration issues attractive to his base, particularly when spun as a reason for job losses. Trump’s policies have so far not returned well-paying manufacturing jobs to swing states like Michigan, Pennsylvania, and Wisconsin.
“Mexico is an easy target for Trump,” Fattore said. “He still thinks he can reach his base by targeting Mexico through not just immigration policy but economic policy. People who don’t have time to do the research are going to believe the president, especially if they voted for him.”
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Senate confirms new Trump ambassador to Russia
WASHINGTON — The United States has a new ambassador to Russia after the Senate voted Thursday to confirm the No. 2 official at the State Department to the post.
Deputy Secretary of State John Sullivan was confirmed by a 70-22 vote. An unusually large number of Democrats supported the nomination in the current impeachment-charged partisan political atmosphere on Capitol Hill. Senate votes on President Donald Trump’s nominees are often much closer and typically fall on strict party lines.
Sullivan will replace Jon Huntsman at the helm of the U.S. Embassy in Moscow. Huntsman stepped down from the post in August and is now running for governor of Utah, a job he held a decade ago.
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Sullivan’s confirmation comes at a tense time in U.S.-Russia relations that have been damaged by Russian interference in the 2016 presidential election and marred by bitter disagreements over Ukraine, Syria and Venezuela. The two countries have also engaged in tit-for-tat diplomatic expulsions over the past three years.
Sullivan had been the lead U.S. official in talks with Russia on counter-terrorism and strategic security and testified in his confirmation hearing that Russian efforts to undermine democracies must be combated. He said then that he would be “relentless” in confronting Russia over election interference, hostile moves against neighbors such as Georgia and Ukraine, human rights abuses and violations of arms control agreements.
Despite that stance, Russian Foreign Minister Sergey Lavrov said on a trip to Washington this week that Sullivan would be welcome in Moscow. “We know him as a very highly professional diplomat; we’ll be happy to cooperate with him,” Lavrov told reporters at a joint news conference with Secretary of State Mike Pompeo.
But Sullivan, who held senior positions in the Justice, Defense and Commerce departments in both Bush administrations, is perhaps more widely known from the Ukraine-related impeachment proceedings against Trump.
Sullivan was the official who delivered the news to former U.S. Ambassador to Ukraine Marie Yovanovitch that Trump had lost confidence in her and that she was being recalled early from the post. Sullivan told the Senate Foreign Relations Committee in late October that he was given no other explanation for Yovanovitch’s removal and told her that he did not believe she had done anything to warrant her recall.
Asked why he did not oppose Yovanovitch’s ouster or speak out publicly on her behalf at the time, Sullivan said ambassadors serve at the pleasure of the president and can be removed with or without cause. He noted that his uncle, a former U.S. ambassador to Iran, had been recalled early from Tehran by the Carter administration for what the family believed to be unfair political reasons.
“When the president loses confidence in the ambassador, right or wrong, the ambassador goes,” Sullivan said, adding that he and Pompeo had tried to push back on Giuliani’s campaign.
Sullivan said he reviewed a package of negative information about Yovanovitch that was given to the department by “someone at the White House” after he and Pompeo inquired about complaints against her from Trump’s personal attorney Rudy Giuliani and others. But Sullivan said he concluded the information contained nothing that would warrant action against her.
Many of the Democrats who voted against Sullivan’s ambassadorial nomination, including the ranking member of the Foreign Relations Committee, Sen. Robert Menendez of New Jersey, had earlier expressed concerns about his judgement and handling of the Yovanovitch dismissal.
The Senate is expected soon to vote on the nomination of Steven Biegun to replace Sullivan as Pompeo’s top deputy. Biegun, a former Ford Motor Co. executive, is currently the special envoy for North Korea and has been the lead negotiator with North in now-stalled denuclearization talks. Trump nominated Biegun to the post on Oct. 31, a day after Sullivan’s confirmation hearing.
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