In late May, President Donald Trump presented Mexico with a stark choice: Stop the flow of immigrants crossing illegally into the United States from Mexico or face tariffs on everything imported from Mexico into the United States. This tax was to start at 5% and escalate 5% each month, up to a maximum of 25 percent, an enormous additional cost for American consumers that would have completely reshaped trade, manufacturing and buyer behavior.
Stock markets plummeted because of this bad policy. The Federal Reserve chairman, recognizing that Trump's plan could move the nation from boom times toward recession in a flash, promised to cut interest rates if necessary. Democratic and Republican members of Congress united to sound alarms against the tariffs. Even American corporations, normally supportive of punitive trade actions against other nations, objected to a plan that would have devastated their supply chains.
Then, after he returned from a visit to Europe on Friday, Trump reversed course, declaring the tariffs were called off because Mexico had made a deal.
Using the president's original standard, such a deal would mean Mexico has agreed to stop the flow of immigrants into the United States. That is not the case. If you go by what Trump claimed when he called off the tariffs, there was now a big new deal to, according to his Friday tweet, "greatly reduce, or eliminate, Illegal Immigration coming from Mexico and into the United States." That's not quite the case, either, as the largest components of what Mexico says it will do were agreed to months ago, specifically in December and March. And illegal border crossings won't be curtailed until a comprehensive plan that deals with the root causes of this flow is adopted.
The steps Mexico is taking might well help control the crisis at the border. They include deploying more of Mexico's National Guard to its southern border to stop people fleeing northward, and keeping more asylum-seekers in Mexico while their claims are processed. But Trump's threat of tariffs that could have cost American families an average of $900 a year was mostly an act of political theater, undertaken so the president could save the nation from the economic crisis he created.
If Trump truly believed pushing Mexico to help stop illegal immigration ought to be part of trade policy, he would have included it in the United States-Mexico-Canada trade agreement he signed with Mexico and Canada to replace the North American Free Trade Agreement. The new deal still awaits congressional approval, thanks largely to nonsense like this tariff scare. But since he wanted to manufacture an emergency so he could alleviate it, this border drama made sense.
The tariff threats, even dispelled, have consequence. Something is lost to us with each of these episodes. Our allies lose more trust in us, our own national stability is further fractured, and our politics become increasingly incomprehensible and the object of derision.
During his campaign, Trump promised the nation that we'd win so much we'd be sick and tired of it. If this is his idea of winning, he was right.
