Mexican Standoff Backs Trump Against a Wall

(Bloomberg) --

When it comes to his planned tariffs on Mexico, Donald Trump is in a box of his own making.

By tying a signature issue — stemming the flow of illegal immigration across the southern border — to levies on America's largest trading partner, the U.S. president has left himself little room to maneuver.

He's facing a backlash from Senate Republicans, who are threatening legislative action to thwart his plan to place 5% tariffs on all Mexican imports starting Monday. Should Trump back down, he risks looking weak on immigration and trade — two key issues with his base.

The chamber’s Republican majority leader, Mitch McConnell, told administration officials yesterday that Trump should hold off on imposing the tariffs until he can personally make his case to lawmakers.

U.S. and Mexican negotiators are set to resume talks today in Washington, after Trump tweeted last night that “not nearly enough” progress had been made so far.

“They have to step up to the plate,” the president told reporters this morning before boarding Air Force One in Shannon, Ireland, en route to France for events commemorating the D-Day anniversary.

With time running short, the president abroad, Republican opposition on Capitol Hill hardening and Trump signaling he wants to play hardball, the path to avoid a potentially costly trade escalation with a close ally looks perilously narrow.

Global Headlines

Up in arms | China protested a potential $2 billion arms deal between the Trump administration and Taiwan that includes the U.S. Army’s best tank, saying it was “severely concerned” about such a sale. China sees Taiwan as an integral part of its territory that must be unified by force if necessary, and firmly opposes U.S. arms sales to the democratically run island. The move could intensify already-simmering tensions between Beijing and Washington.

Brexit skirmishes | The Conservative party race to succeed Theresa May as U.K. prime minister is rapidly becoming a competition over Brexit promises. Or as candidate Sam Gyimah described it to Bloomberg, “chest-beating men” pledging to channel their inner Trump to get a better deal from the European Union. Will rival candidates be prepared to leave the bloc without an agreement in October if those efforts fail? Party members are increasingly demanding the answer be “yes.”

Data block | France won’t allow Chinese tech giant Huawei Technologies access to key user data even if its equipment is used in the French 5G network, according to its cybersecurity agency chief. Meanwhile, U.K. government officials want the U.S. to clarify how Trump’s export blacklisting of Huawei affects companies overseas, a move that has delayed Britain’s own 5G decision. Russia has no such qualms; its largest wireless carrier signed an agreement with Huawei yesterday on starting 5G pilot zones this year.

Blame game | Fiat Chrysler and the government in Paris blamed each other for the sudden collapse of negotiations to combine the Italian-American carmaker with Renault. While Fiat Chrysler and France are still open to an agreement that would create the world’s third-largest automaker, Fiat Chrysler said “political conditions in France do not currently exist” to close the deal.

Making her move | Elizabeth Warren has been climbing in the Democratic presidential contest by using a stream of policy blueprints and hours of selfies with voters to chip away at her immediate target: Bernie Sanders. Warren’s path to challenging front-runner Joe Biden runs through Sanders, her main rival for progressive voters and the candidate who’s steadily held the No. 2 spot in most polls.

What to Watch

• Trump is scheduled to meet today with French President Emmanuel Macron during his visit to commemorations of the 75th anniversary of the D-Day Normandy landings.
• Japanese Prime Minister Shinzo Abe will visit Iran next week in a bid to defuse tensions between Washington and Tehran. Japan has long maintained good relations with the Islamic Republic, while remaining a key U.S. ally.

And finally...Nicholas Sloane, a 56-year-old South African marine-salvage master who’s survived helicopter crashes and burning ships, simply wanted to take a bath last year at his home in Cape Town but couldn’t because of a severe water shortage then gripping the city. His wife told him, “You’d better do something.” As Caroline Winter reports, Sloane’s come up with an unusual solution: harness and tow an enormous Antarctic iceberg to South Africa and convert it into municipal water.

--With assistance from Karen Leigh, Stuart Biggs and Karl Maier.

To contact the editor responsible for this story: Anthony Halpin at thalpin5@bloomberg.net

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