President Donald Trump’s widening trade war will buffet Minnesota even more should he follow through with threats to impose punitive tariffs as early as Monday on Mexico, the second-largest trading partner for both the U.S. and this state.
Worse still, Trump’s goal here has nothing to do with the actual trade between the two nations. Rather, he is using tariffs as a blunt-force instrument to strong-arm Mexico into curbing the recent surge of immigrant crossings at the U.S. southern border.
Many of those crossing are not Mexican nationals, but refugees from countries farther south. With little warning and fewer details, Trump simply announced in a recent tweet that, “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.” It was later learned that the rate could rise to 25% unless Mexico complied with a directive that is vague at best.
This kind of autocratic behavior is intolerable when the actions of one individual carry such risk for so many. The fallout from Trump’s trade tirades is becoming increasingly evident in Minnesota.
As Trump has threatened and bullied this nation’s closest allies, numbers have started to shift. Minnesota exports to top trade partner Canada fell 3% in the first quarter of 2019. Exports to third-ranked China plummeted 13% in the same period. Minnesota soybean and pork producers felt the sting there. Overall exports to Mexico grew 5% in the same period, but a closer look reveals that food byproducts and meat exports are both down. It is Minnesota’s top destination for exports of corn, poultry, wheat and dairy and a close second for pork and soybeans.
New tariffs, regardless of the Trump administration’s spin, would inflict needless costs for Minnesota’s producers and consumers alike. And there is the distinct probability that Mexico would respond in kind with retaliatory tariffs on U.S. goods. After years of duty-free trade, Mexico, the U.S. and Canada have developed intricately interlocking economic relationships and supply chains on everything from car parts to corn. The U.S.-Mexico trade relationship alone amounted to $678 billion last year. That is not something to be jeopardized lightly.
As we’ve noted before, the power to unilaterally enact tariffs has, in Trump’s undiscerning hands, become a weapon that is causing havoc with long-established trade relationships. If there is no other guardrail here, an absolute one should be a prohibition against using tariffs for issues unrelated to trade. Trump’s unwillingness to work with Congress on comprehensive immigration reform does not entitle him to wreck vital trade relationships.
This country should both secure its borders and entry points while also figuring out a humane, reasonable way to deal with the growing numbers of refugees, many of them families fleeing violence in their home countries. That kind of nuanced, effective policy will come about through respectful collaborations with Congress and the Mexican government, which is both a sovereign nation and strong U.S. ally and trading partner.
Still hanging in the balance is the U.S.-Mexico-Canada (USMC) trade agreement that replaced NAFTA, which governed economic relations across North America for decades. House Agricultural Committee Chairman Collin Peterson, D-Minn., told CBS recently that new tariffs on Mexico would make congressional ratification of the new agreement “virtually impossible.”
It’s no secret by now that Trump is enamored of tariffs in large measure because he can wield them on little more than his own whim. Allowing him to broaden his power to issues not related to trade is a precedent this country dare not set.