President Trump’s surprise threat to impose new tariffs on Mexico over immigration underscored that he has been a disruptive force not just to U.S. trade policy but to his own trade negotiating team.
“Trump’s approach makes the job of the people in his administration a lot more difficult,” said Simon Lester, a trade policy analyst with the free market Cato Institute. “The foreign officials they are negotiating with must be raising questions about whether what is agreed to will actually be supported by Trump.”
The president’s May 30 threat to place a 5% tariff on all goods imported from Mexico, rising to 25% if the country does not curb migration to the U.S., came just as his administration finally started to get traction on one of its top trade policy goals, passage of the U.S.-Mexico-Canada Agreement on trade. The Mexican Senate had begun consideration of the deal that day, while the Canadian Parliament had started the day before. The White House also formally notified the House that it would submit the deal in 30 days, a move meant to pressure Speaker Nancy Pelosi, D-Calif., to schedule a vote.
Trump allies such as Senate Finance Committee Chairman Chuck Grassley, R-Iowa, were aghast, warning that new tariffs on Mexico “would seriously jeopardize passage of USMCA.”
Among those who were opposed were U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, the Wall Street Journal reported, citing sources close to the matter.
The announcement came just hours after Vice President Mike Pence completed a trip to Ottawa to coordinate the trade deal’s passage with Canadian Prime Minister Justin Trudeau. Trudeau officials told Canadian media afterward that Pence did not give them any heads-up regarding the announcement.
Trade partners can’t know whether the people they are negotiating with are the ones capable of making final offers, said Welles Orr, an assistant U.S. trade representative in the first Bush administration. “Who is speaking for whom? It has been a source of frustration with not just the Chinese but the Canadians, the Mexicans, and all our other trade partners,” he said. “A negotiator doesn’t come to the table from a position of strength if he doesn’t fully have the backing of the president. That’s just not how it has ever worked before.”
In the days that followed, administration officials took to the media to argue that the threatened tariffs were simply a tool to force Mexico to alter its immigration policy and not actually related to trade policy. “That’s not the purpose of this. This is a national security response,” trade policy adviser Peter Navarro told Fox Business. White House acting chief of staff Mick Mulvaney told Fox News the tariff plan was “an immigration matter, it’s not a trade matter.”
On the Sunday following the announcement, Trump contradicted them both, tweeting that Mexico “could solve the Border Crisis in one day if they so desired. Otherwise, our companies and jobs are coming back to the USA!”
Trump’s comments don’t appear to reflect any animosity between the president and his trade negotiators, Orr says. Trump typically speaks warmly of his trade team. “Lighthizer and the president couldn’t be more simpatico on getting to the right trade outcomes. How they get to them on the negotiating table has been a bit of a conundrum,” Orr said.
In a live televised Oval Office meeting in February, conducted as Lighthizer’s counterpart Chinese Vice Premier Liu He sat nearby, Trump overruled Lighthizer for allowing discussion of a “memorandum of understanding” in the trade talks with Beijing. Trump argued the items were useless because they didn’t mean anything.
Lighthizer attempted to argue they did. “A memorandum of understanding is a binding agreement between two people,” he told the assembled reporters, only to be again contradicted by Trump. “To me, the final contract is really the thing, Bob, and I think you mean that, too. A memorandum of understanding is exactly that. It is a memorandum of what our understanding is,” he said. Lighthizer declared defeat, saying that henceforth he would no longer use the phrase “memorandum of understanding.”
Under Trump, the Treasury Department has repeatedly refused to label China a currency manipulator, claiming in sober reports there isn’t evidence for such a determination. The president has continued to insist at times that it is, tweeting last year, “Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!”
In May, White House economic adviser Larry Kudlow appeared on Fox News and conceded that tariffs on foreign goods often resulted in higher prices for U.S. consumers. “In fact, both sides will pay. Both sides will pay in these things.” The admission prompted a flurry of coverage. The following day, Trump tweeted, “Their is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today.”
Administration officials involved in trade policy, speaking anonymously, have sometimes acknowledged that Trump’s announcements on trade were as much news to them as they were to anyone else.
“For our trading partners to offer the best deal in trade negotiations, they need some certainty that they are dealing with someone who has the authority to represent the administration. That’s got to be a challenge when there is a track record of the president going in a different direction,” said Bryan Riley, trade policy adviser for the National Taxpayers Union.
