Published: Sat, June 08, 2019
Money | By Ethel Goodwin

US and Mexico Making Headway on Deal to Prevent New Tariffs

US and Mexico Making Headway on Deal to Prevent New Tariffs

Trump's fellow Republicans also are not keen on the prospect of a two-front trade war.

Amid the negotiations, some Republican lawmakers have continued to express concern about the impact of tariffs on all goods that cross into the USA from Mexico, a move that could ultimately lead to higher prices for U.S. consumers and hurt United States businesses as well as the Mexican economy.

Beyond Trump and several White House advisers, few in the administration believe imposing tariffs is a good idea, according to officials familiar with internal deliberations.

In Mexico City, meanwhile, Mexican President Andrés Manuel López Obrador said he was "optimistic" that the two sides would reach an accord.

The measure has been widely criticized by lawmakers who claim Trump is about to exceed his executive power; the tariffs are likely to draw additional legal challenges to the Administration, who are already mired in a power struggle with the House Democrats. "Trade agreements are the way to do it", said Jared Powell, her spokesman. David Perdue, a former Fortune 500 business executive and close ally of Trump.

"It's very chaotic. We might be able to put up with 5% for a little bit, 10% maybe", said Guillermo Valencia, president of Valencia International, a customs broker in Nogales, Arizona.

"They shouldn't be allowing people to come through their country from Central (America), from Honduras and Guatemala, (and) El Salvador", he said. Rick Scott, "I don't like it, but I'm going to support the president".

"We told Mexico the tariffs go on and I mean it, too".

The frantic, last-minute talks underscore Trump's chaotic approach even when decisions have enormous economic consequences for both the USA and its closest allies.

The 25-year-old North American Free Trade Agreement gradually eliminated the vast majority of tariffs between the United States and Mexico, leaving many importers unprepared to pay the new duties if they go into effect. "It's been encouraging", Pence said on Thursday. But it's unclear if any of the concessions so far will satisfy the president.

Mexico City was deploying 6,000 National Guard troops to its southern border with Guatemala, blocked hundreds of migrants in a new caravan and froze the bank accounts of suspected human traffickers in hopes of appeasing Washington's demands.

The immigration issue came into sharper focus on Wednesday with news that US border officers said they apprehended more than 132,000 people crossing from Mexico in May, the highest monthly total in more than a decade and reaching what officials said were "crisis" levels.

That would mean the USA would quickly send Guatemalans to Mexico, where they could seek asylum.

Despite this, Mexican officials have prepared a list of United States goods that may face retaliatory tariffs if talks between the two countries fail.

Trump has nonetheless embraced tariffs as a political tool he can use to force countries to comply with his demands - in this case on his signature issue of immigration. The tactic runs counter to long-held GOP views on trade - prioritizing free markets - and is pushing Republicans, particularly those who will be running for re-election alongside Trump in 2020, to fall in line.

"If no agreement is reached, tariffs at the 5% level will begin on Monday, with monthly increases as per schedule", the president said.

"We're having a great talk with Mexico".

The sudden threat has sent American importers scrambling to prepare. That's up by about $100 million from 2017, despite tariffs on steel and aluminum imposed by the United States in early 2018 and retaliatory tariffs from Mexico.

To be sure, plenty of Republicans are resisting Trump's transformation.

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