Business Groups React With Alarm to Trump's Mexico Tariff Threat

The U.S. Chamber of Commerce said it is considering suing the Trump administration over its use of the International Emergency Economic Powers Act to levy tariffs on all Mexican imports beginning June 10. The administration said it will start at 5 percent, and if Mexico does not do more to stem the flow of Central American migrants to the U.S., it will raise that tariff to 10 percent July 1, then increase it by 5 percent each month until it reaches 25 percent Oct. 1.

In a press call with reporters May 31, Neil Bradley, chief policy officer at the U.S. Chamber, said they could not comment about a particular legal approach. His group was just one of many asking the president not to go through with his threat, and warning of dire consequences to consumers, industry and the economy if he does raise tariffs on Mexican imports.

The National Foreign Trade Council called the move "dangerous and destabilizing," said Americans would pay more for avocados, clothing and cars, among other items, and added that "this action will have repercussions throughout Mexico’s economy, which will intensify, rather than reduce, the problems at the border."

"Radical and sudden action against our neighbor and best trading partner, using a law that has only been invoked against rogue nations and sponsors of terrorism, is an action unworthy of a great nation and world leader,” the group said, in a statement attributed to NFTC President Rufus Yerxa.

The auto manufacturing sector would be most hurt by escalating tariffs on all Mexican imports, and that industry may have put out the mildest statement reacting to the president's announcement the evening of May 30. "The imposition of tariffs against Mexico will undermine [the NAFTA rewrite's] positive impact and would impose significant cost on the U.S. auto industry,” the American Automotive Policy Council said May 31.

The Retail Industry Leaders Association said, "Threatening tariffs on Mexican imports while simultaneously seeking support in Congress for a trade deal aimed at keeping trade barriers low with Mexico is a confusing and counterproductive strategy."

The American Apparel and Footwear Association, which noted that Mexico is the top U.S. source of men's and boy's jeans, called the move "unfathomable, especially as we are working to gain approval of the USMCA in the United States and as the USMCA is about to be introduced in the Mexican legislature."

The National Council of Textile Organizations, which often finds itself on the opposite side of issues to AAFA, said the U.S. textile industry exported $4.7 billion in yarn and fabrics to Mexico in 2018. "Adding tariffs to Mexican apparel imports, which largely contain U.S. textile inputs, would significantly disrupt this industry and jeopardize jobs on both sides of the border,” NCTO CEO Kim Glas said. "And as a result, it will accelerate substantially the immigration issues the administration is seeking to address." She also said it would mean even more of apparel imports would come from China.

The Consumer Technology Association said tariffs on Mexico would hurt U.S. interests. The tariffs are “potentially devastating to American small businesses and all the people they employ,” CTA President Gary Shapiro said. “Mexico is not only one of our top trading partners, it's the number one export market for American consumer technology sector products.”

In the announcement of the ratcheting tariffs plan, President Donald Trump wrote, "Should Mexico choose not to cooperate on reducing unlawful migration, the sustained imposition of Tariffs will produce a massive return of jobs back to American cities and towns. Remember, our great country has been the 'piggy bank' from which everybody wants only to TAKE."

John Murphy, senior vice president for international policy at the U.S. Chamber, told reporters that doesn't make sense when the No. 1 complaint the Chamber hears as it travels the country is that companies can't find workers to fill vacancies. He said that "in that environment the idea that the United States can simply make all the things we’re currently importing is simply not practical."