Trump Says He’s ‘Okay’ With Tariffs on Mexico Should Talks Fail

(Bloomberg) -- President Donald Trump said he’s “really okay” with imposing tariffs on Mexican exports to the U.S. should talks fail this week over illegal migration across the southern border.

The Mexican government is sending a delegation to Washington on Wednesday, the president said, to discuss migration and Trump’s threat to impose an escalating tariff on Mexico’s U.S. exports unless the country takes unspecified steps to stop a surge of people crossing the border.

“Everyone’s coming through Mexico, including drugs, including human trafficking,” Trump told reporters as he departed the White House for the U.K. on Sunday. “We’re going to stop it or we’re not going do business, and that’s going to be it. Very simple.

“We’ll see what can be done” in the talks, he added. “But if it’s not done, you know what we’re going to be doing, and I’m really okay with that.”

‘Companies and Jobs’

Earlier Sunday, Trump said in a tweet that “companies and jobs” would return to the U.S. as a result of his Mexico tariffs -- a remark that contradicted two top aides who had said hours earlier on cable news programs that the move was motivated only by border security concerns.

White House Chief of Staff Mick Mulvaney said in an interview on “Fox News Sunday” that the tariff plan was “an immigration matter, it’s not a trade matter.”

Since October, more than 530,000 undocumented migrants have either been apprehended after crossing the U.S. border or stopped from entering the country, including more than 100,000 in both March and April, according to Customs and Border Protection. In all of fiscal 2018, about 521,000 people were apprehended after crossing the southwest border or stopped from entering.

White House trade adviser Peter Navarro, interviewed on Fox News Channel’s “Justice” on Saturday, was asked directly whether the tariffs were in fact a “maneuver” to bring auto manufacturing back to the U.S., which has long been a goal of Trump’s.

“Zero, no. That’s not the purpose of this,” Navarro said. “This is a national security response.”

As various Mexican officials prepare to travel to the U.S. to try to stave off the tariff threat, Trump dismissed their efforts in advance. He will not be in the country when the talks take place.

“They’ve been ‘talking’ for 25 years. We want action, not talk,” the president said on Twitter.

Trump said on May 30 he’d place an initial 5% levy on Mexican goods this month, with the tariffs rising each month -- to as much as 25% by October -- if the nation doesn’t halt the flow of undocumented migrants to the U.S.

Sunday’s comments came ahead of planned high-level meetings in Washington this week to discuss the border situation. Mexican Foreign Minister Marcelo Ebrard is expected to meet with his U.S. counterpart, Secretary of State Michael Pompeo, and other officials to attempt to defuse the trade spat.

Still Time

Separately, Graciela Marquez, Mexico’s economy minister, said Sunday she plans to meet U.S. Commerce Secretary Wilbur Ross in Washington on Monday.

House Minority Leader Kevin McCarthy of Texas suggested there was still time to find a solution and avoid the tariffs, noting that the initial duties don’t take effect until June 10.

“What the president is doing is getting the attention,” McCarthy said on Fox News’s “Sunday Morning Futures.”

Still, Mulvaney rejected the idea the tariffs are a negotiating ploy to get Mexico’s attention, saying on Fox that Trump is “absolutely deadly serious” about imposing the duties and “I fully expect these tariffs to go onto at least the five percent level on June 10th.”

Mulvaney rejected a suggestion that the tariffs endanger congressional approval of Trump’s new U.S.-Mexico-Canada trade pact, known as the USMCA -- a replacement for the current North American Free Trade Agreement developed after over a year of painstaking negotiations among the three countries.

USMCA Worry

Officials within the Trump administration -- including Trade Representative Robert Lighthizer -- opposed the Mexican tariff move, worry that it could poison the prospects of Trump’s proposed trade deal, according to people with knowledge of the matter. Some key congressional Republicans have also expressed their opposition.

Republican Senator John Kennedy of Louisiana called the use of tariffs to curb immigration “a mistake” on CBS’s “Face the Nation” Sunday and said potential harm to the U.S. economy from steep tariffs would deter Trump in the end.

Trump this weekend has repeatedly touted jobs and factories as the winners from his tariff action.

“Our many companies and jobs that have been foolishly allowed to move South of the Border, will be brought back into the United States through taxation (Tariffs),” Trump tweeted earlier on Sunday.

U.S. stocks and the Mexican peso slumped on Friday after Trump’s threat to impose escalating tariffs if no resolution is reached.

Asked how Trump would evaluate whether Mexico had satisfied his demands, Mulvaney said the actions Mexico needs to take were intentionally left “ad-hoc.”

Among the things the Mexican government could do, he said, were securing its own southern border with Central America, going after their “domestic terrorist organizations,” and making Mexico a safe place for people who wished to claim asylum.

“We need a vast reduction in the numbers crossing,” acting Homeland Security Secretary Kevin McAleenan said on CNN’s “State of the Union” about how he would judge whether Mexico was responding adequately. “We need need Mexico to step up and do more.”

--With assistance from Ben Bain and Steven T. Dennis.

To contact the reporters on this story: Josh Wingrove in Washington at jwingrove4@bloomberg.net;Ben Brody in Washington at btenerellabr@bloomberg.net

To contact the editors responsible for this story: Kevin Whitelaw at kwhitelaw@bloomberg.net, Mark Niquette

©2019 Bloomberg L.P.