Wednesday, June 5, 2019

Trump Still Alone on Mexcian Tariffs (Except Maybe for House Republicans…)

Senate Republicans, Senate Democrats, Mexican officials, conservative media, and Big Business all agree: the tariffs are a bad idea and should be stopped.

My take: High-level talks set for Wednesday in DC could change the contours, but for now, Trump seems determined to impose an initial 5% tariff on Mexican goods on Monday.  And House Republicans would probably offer enough support to let a presidential veto stand if Congress tried to step in.

The Washington Post sums up the stand-off perfectly:

“Mexican officials have been confused about what precisely the White House is demanding in exchange for the tariffs to be withdrawn, and White House officials will not say exactly what Trump wants. Some White House officials believe the meeting will mark the beginning of earnest negotiations that will pick up in intensity after the tariffs have been in place for a while. But many GOP senators view the imposition of the tariffs as unacceptable, and even as they hoped for a positive outcome from Wednesday’s talks they weighed their options for stopping the levies.”

Mexico wants to figure out how to calm the waters, but it won’t give in to Trump completely.  Goldman Sachs put the chances of the tariffs going into effect at 70% and substantially downgraded the chances of passage of the new North American trade deal.

Mexican Foreign Minister Marcelo Ebrard, speaking basically for Mitch McConnell and almost all Senate Republicans (not to mention the US business community), said at a DC press conference, “By what we have seen so far, we will be able to reach an agreement.  That is why I think the imposition of tariffs can be avoided,” adding he thinks the chances of heading off the Monday imposition of tariffs ahead of Wednesday’s bilateral meetings are 80%.

Perhaps showing his cards, the president responded to Chuck Schumer’s Senate floor political punditry (“President Trump has a habit of proposing asinine and dangerous policies before backing off.”) by calling the Democratic leader a “creep” on Twitter.

Republican Senators are much more tolerant of a tariff war with China than with Mexico primarily for three reasons. One, the Mexican tariffs would have a much more immediate negative effect on their constituents and donors.   Two, American public opinion is much less favorable towards China than Mexico.  And, three, the threatened Mexican tariffs could derail the NAFTA replacement deal that leaders in both parties would like to see passed.

If Trump were a “normal” Republican president, he would look at the voices arrayed against his proposed tariffs and use Wednesday’s meetings to find a way to claim victory and withdraw the threat.

But two elements of the president’s brand are hanging in the balance. In his mind, Trump stands for strength in the face of attacks (especially from the DC establishment) and for using every tool in the tool box to shut down illegal immigration and win trade fights. 

The betting remains in most quarters that Trump will give up and give in.  And he might. But taking him seriously and literally, right now, suggests the tariffs are coming, with major political and economic implications.

In other news:

House passes Dreamer plan.  Will die in Senate.

Harry Reid changes course in favor of Trump impeachment, while Biden basically echoes that position.  Will be ignored by Pelosi.

Biden and Warren put out climate plans, while Biden faces fresh plagiarism charges.

Trump weak, Biden strong in new North Carolina poll.

Hope Hicks holds back government documents from House, while offering up campaign material.

Top sports story: Durant out, Klay questionable for Game 3 against Raptors

ESPN

Top business story: Dow rebounds as Fed signals potential interest rate cut

Wall Street Journal

Top entertainment story: Behind Amazon’s marketing campaign for Mindy Kaling’s new movie

Deadline

Big Four

Iowa

Des Moines Register

President Donald Trump’s Iowa visit will include Council Bluffs stop to tout E15.

Trump to hear thanks, concerns in Iowa; governor grateful for flood help but worried about tariffs.

South Carolina

Michael LaPierre launches challenge against Lindsey Graham.

A Pickens horse farmer and self-described “Reagan conservative” announced Tuesday he is seeking the seat of incumbent U.S. Sen. Lindsey Graham.

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