Why the tariffs are bad news for America and for Donald Trump

President Trump has announced that the United States will impose new tariffs of 5 percent on all Mexican imports starting this month. The White House said the tariffs will gradually increase to 25 percent by October if Mexico does not take action to “reduce or eliminate the number of illegal aliens” crossing into the United States. Put simply, these tariffs are bad for the country, bad for the markets, and bad for Trump.

The impact of these tariffs will be felt nationally and will have painful consequences for the economies of more than two dozen states, ranging from California to Michigan to Texas. We are already seeing the negative impact of these tariff threats on the markets. In the morning after the news, the Dow Jones Industrial Average dropped 300 points, the S&P 500 Index fell 1.2 percent, and the Nasdaq lost 1.3 percent. Automakers such as Fiat Chrysler, whose stock dropped 5 percent, were some of the biggest losers, as they heavily rely on imports from Mexico.

It is clear that investors are rattled over the disruption that these tariffs will cause to global economic growth and business. While the tariffs Trump imposed on China were connected to palpable economic issues such as access to markets and intellectual property, his latest move of using tariffs for merely political ends represents a major departure that will only backfire and damage his chances for reelection in 2020.

Ultimately, these tariffs will essentially nullify the main accomplishment of the Trump, which is a strong economy. It also has the potential to kill the ratification of updates to the North American Free Trade Agreement, a top priority for the Trump administration. As such, many lawmakers and leaders on both sides of the aisle have slammed Trump and urged him to reconsider his decision. “This is a misuse of presidential tariff authority and counter to congressional intent,” said Republican Senator Chuck Grassley, who is chairman of the Senate Finance Committee.

Additionally, Chamber of Commerce officials were flummoxed by this latest decision, given the clear and demonstrable impact these tariffs would have on passing United States Canada Mexico Agreement, as well as on American consumers and companies at large. “This argument that everyone can simply relocate their supply chains” flies in the face of the top priority of the Trump administration and “flies in the face of reality,” said Neil Bradley, the chief policy officer at the Chamber of Commerce.

From a political standpoint, among those states that will be hit the hardest by these tariffs are states that Trump absolutely needs to win in 2020 in order to remain president. Michigan, a state which Trump won in 2016 but went for Barack Obama in 2008 and 2012, would be the second hardest hit state, as about 38 percent of its imported products come from Mexico.

The bulk of these tariffs will hit automobile manufacturers, particularly in Detroit, and will certainly have a detrimental impact on the auto industry as a whole. Indeed, there is arguably no other major industry that is as dependent on Mexico for trade as automobile manufacturers are. Put bluntly, Trump cannot win reelection unless he wins Michigan, and imposing sweeping tariffs that will cost the state billions of dollars and potentially thousands of jobs is certainly not the way to do so.

Additionally, these new tariffs would hit hardest Arizona, a traditionally Republican border state that has lately swung in favor of Democrats and will certainly be in play in 2020. Arizona gets 40 percent of its imports from Mexico, which is the highest portion of any state. Ultimately, these tariffs will only damage the country, the markets, and the president, and will do nothing to solve the crisis at the southern border.

To solve the border crisis, we need comprehensive immigration reform where Dreamers are protected and security is enhanced. We do not need retaliatory tariffs that will damage our economy, our workers, and our businesses. I urge the president to reconsider these tariffs on Mexico, if not for his own sake, then for the sake of the country.

Douglas E. Schoen (@DouglasESchoen) served as a pollster for President Clinton. He is a political consultant, Fox News contributor, and the author of “Collapse: A World in Crisis and the Urgency of American Leadership.”

Tags Business China Donald Trump Election International Mexico Policy Trade

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