Mexico tariffs draw sharp response from auto industry, business groups

Thursday, 06 Jun, 2019

Many Republicans are already suggesting they could vote on a resolution of disapproval to try and thwart the tariffs, but Trump said it would be "foolish" for GOP lawmakers to attempt to block the tariffs during a press conference with British Prime Minister Theresa May in London Tuesday. The tax would eventually increase to as much as 25 percent until the flow of undocumented immigrants across the border stops.

Mexican President Andres Manuel Lopez Obrador has expressed optimism that Mexico and the USA can reach an agreement before Washington imposes a five percent tariff on Mexican goods beginning next Monday.

Arizona lawmakers, business officials and experts blasted President Donald Trump 's threat to impose a tariff on Mexican goods in hopes of cutting immigration, calling his plan everything from "terribly damaging" to "unhinged".

A 5% tariff on imported goods from Mexico, which a year ago totaled $347 billion, according to U.S. data, would result in a potential tax increase on American businesses and consumers of $17 billion, the U.S. Chamber of Commerce estimated. The historically Republican state voted narrowly for Trump in 2016, but in last year's midterm elections Democrats picked up offices they had not won in decades. In other words, United States consumers will eventually absorb that burden, particularly if the tariffs on Mexican goods rise to 25% as Trump outlined.

Ebrard said his team will be prepared for a non-agreement scenario despite his optimism that a deal will be reached.

Reckitt Benckiser CEO Rakesh Kapoor told Trump his company planned to invest an addition $200 million between its British and US businesses his year, including a $70 million investment in a MI manufacturing facility. He said tariffs on Mexico could shock the auto supply chain, as many parts and components cross the border multiple times before a vehicle is finished.

At a lengthy closed-door lunch meeting at the Capitol, senators took turns warning Trump officials there could be trouble if the GOP-held Senate votes on disapproving the tariffs.

White House trade adviser Peter Navarro told CNN the tariffs might not be needed because the threat alone was enough to "have the Mexicans' attention". He wants to pressure Mexico to do more to keep Central American migrants from traveling north to the U.S.

Mitch McConnell (R-Ky.) and other Republicans can tell Trump that they are against the tariffs with Mexico, but they cannot stand with the president when he's attacked verbally by the opposition media and the Democratic Party.

Trump brushed aside the threat, saying he did not believe Republicans would follow through.

Ebrard arrived in Washington over the weekend to meet Wednesday with Secretary of State Mike Pompeo.

"If the US imposes new tariffs, expect the same from Mexico on USA agricultural products that will have little chance of finding new markets quickly", the group wrote.

"We just did not see this coming", says Ann Wilson, senior vice president of government affairs for the Motor & Equipment Manufacturers Association. "They have not yet proposed it to me".

He also called on the US Congress to pass immigration laws to address the situation and blamed Democrats for stalling them. However, due to the evolving global economy, most consumer goods are made overseas or contain foreign parts.

"The most important thing now is to reach an agreement", Lopez Obrador said on Tuesday, indicating he would continue to negotiate with the United States even if Trump went ahead with the tariffs.

On Monday, the Washington Post reported that congressional Republicans were discussing whether they may need to act to block Trump's planned tariffs, which has been criticized by the U.S. Chamber of Commerce and industry groups who worry about increased costs for U.S. businesses and consumers.

Republicans are deeply concerned that Trump's proposed 5% tariffs on all imports from Mexico would spike USA consumers' costs, harm the economy and imperil a major pending US-Mexico-Canada trade deal.