Trump's Mexican tariffs expose administration rifts

President TrumpDonald John TrumpLawmakers release defense bill with parental leave-for-Space-Force deal House Democrats expected to unveil articles of impeachment Tuesday Houston police chief excoriates McConnell, Cornyn and Cruz on gun violence MORE’s abrupt decision to impose sweeping tariffs on Mexico is exposing rifts within his administration on trade and immigration, two core issues he has repeatedly pledged to tackle but where he has struggled to gain ground.

The surprise Thursday night announcement marked a setback for U.S. Trade Representative (USTR) Robert LighthizerRobert (Bob) Emmet LighthizerPelosi casts doubt on USMCA deal in 2019 Pelosi sounds hopeful on new NAFTA deal despite tensions with White House On The Money: Economy adds 164K jobs in July | Trump signs two-year budget deal, but border showdown looms | US, EU strike deal on beef exports MORE, who argued the plan could threaten Trump’s North American trade agreement’s chances of congressional approval, according to three people familiar with the situation.

“Lighthizer tried to make his case once and failed,” said one industry source, who requested anonymity to describe discussions with the administration.

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A USTR spokesperson said in a statement that Lighthizer “supports the president and what the president is doing” but did not specifically mention the new tariffs on Mexico.

Trump’s move was also a loss for business-friendly figures in the administration, such as Treasury Secretary Steven MnuchinSteven Terner MnuchinWhite House, Democrats edge closer to deal on trade Pelosi gets standing ovation at Kennedy Center Honors World Bank approves billion-plus annual China lending plan despite US objections MORE and National Economic Council Director Larry KudlowLawrence (Larry) Alan KudlowMORE. Another industry source said Mnuchin, like Lighthizer, opposed the plan. Kudlow is reportedly away recovering from hip surgery.

A Treasury Department spokesperson said Mnuchin “supports the president’s position.”

Trump decided to threaten Mexico with tariffs on all of its imports as he grew increasingly frustrated with the number of migrants crossing the U.S. southern border, many of whom are seeking asylum, according to two people familiar with the situation.

“This is something the president has been bringing up for months and was kept at bay,” said the first industry source.

What, exactly, the breaking point was for Trump remained a subject of speculation in Washington, with some officials pointing to conservative media reports focused on major apprehensions of migrants at the U.S.-Mexico border. Others noted he teased the move during a diatribe against special counsel Robert MuellerRobert (Bob) Swan MuellerTrump says he'll release financial records before election, knocks Dems' efforts House impeachment hearings: The witch hunt continues Speier says impeachment inquiry shows 'very strong case of bribery' by Trump MORE and viewed it as an effort to change the subject.

Apprehensions at the southern border have risen exponentially since the early months of Trump’s presidency.

In April 2017, Trump’s third full month in office, the number of apprehensions at the southern border fell to its low point of 15,798, according to data from U.S. Customs and Border Protection. The figure has spiraled to over 100,000 in both March and April of this year, the two most recent months for which data is available. The April total — 109,144 — was the highest of Trump’s presidency.

The president’s threat is seen as a boost for advisers such as Peter Navarro and Stephen MillerStephen MillerSenate Democrats demand Trump fire Stephen Miller Marianne Williamson roasted for claim Trump pardoned Charles Manson Juan Williams: Stephen Miller must be fired MORE, who have championed protectionist trade policies and a hard line on immigration, respectively.

Miller for months has urged the administration to adopt more aggressive measures to curb the number of migrants entering the U.S., in part by engineering a purge at the Department of Homeland Security, and he vocally pushed the Mexico tariffs, according to a person familiar with the situation.

The tariffs were discussed in a meeting on immigration this week at the White House that was attended by the president, Miller and White House counsel Pat Cipollone, among others, according to the person. Lighthizer was not present.

Navarro was one of a handful of White House officials who appeared Friday on cable television to defend the plan, saying it should have come as no surprise given Trump’s insistence that Mexico do more to stop illegal migration.

“If you look at it from an investor’s point of view and a corporate point of view, what we have in Mexico is the export, one of their high exports, of illegal aliens. And it’s a criminal enterprise,” the trade adviser said on CNBC.

Sources in Trump’s circle don’t dispute these divisions. But they also contend that the issue also has to be viewed through the lens of the 2020 election campaign, where a continued hard line on immigration will be a central part of the president’s appeal.

“This is definitely a victory for Navarro and Stephen Miller, but this is also a victory for the campaign team, which can use this as another base issue,” said one GOP strategist with ties to the White House who asked for anonymity to speak candidly.

It throws a wrench into the administration’s biggest legislative priority: passage of Trump’s revision of the North American Free Trade Agreement (NAFTA), which has been spearheaded by Lighthizer.

The top trade official had formed a solid working relationship with Speaker Nancy PelosiNancy PelosiHouse Democrats expected to unveil articles of impeachment Tuesday Impeachment witness to meet with Senate GOP Tuesday Press: Pelosi strikes back, hatred is a sin MORE (D-Calif.) that many in the administration and on K Street believed was yielding progress toward pushing the agreement through Congress.

They now fear that Trump’s new tariffs, combined with the White House’s decision to formally start the clock on the legislative process over Pelosi’s objections, could stymie that progress, with one industry source calling the moves “a one-two gut punch.”

Lighthizer was reportedly unenthusiastic about the decision to pressure Democrats on NAFTA, a strategy that is said to be favored by Vice President Pence’s team, according to The Wall Street Journal.

The Republican National Committee, which is closely allied with the White House, and the House GOP Conference both blasted out press releases this week accusing Pelosi of dragging her feet on approving the agreement.

White House counselor Kellyanne ConwayKellyanne Elizabeth ConwayGrocery store behind viral reusable bag at impeachment hearing offers 'free briefcase' promotion Watchdog report finds FBI not motivated by political bias in Trump probe GOP counsel raises eyebrows with shopping bag at impeachment hearing MORE downplayed those fears, telling reporters that “we are fully confident that [the trade deal] could pass the House.”

Although Trump has pushed for tariffs on Mexico for months, administration officials and industry groups described a slapdash rollout that some believe helped contribute to the widespread backlash against the plan.

The White House issued a presidential statement and held a conference call for reporters after Trump announced the tariffs by tweet. But behind the scenes, there was a scramble to pull together the plan. Some key lawmakers, including Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyBottom line Graham: FBI investigation in 2016 turned into a 'criminal conspiracy' House GOP unveils alternative drug pricing measure ahead of Pelosi vote MORE (R-Iowa), were not briefed, and major business associations were either not given a heads-up or told about it at the last minute.

Grassley, whose office said it found out about the tariffs on Twitter, called them “a misuse of presidential tariff authority” that could derail Trump’s NAFTA rewrite. That sentiment was echoed by business groups, with the U.S. Chamber of Commerce saying it might even sue to stop the tariffs.

The administration has sought to assuage fears that the skirmish over tariffs could spiral out of control, especially if there is little Mexico can do in concrete terms to meet the Trump administration’s demands.

Acting Homeland Security Secretary Kevin McAleenan has outlined three areas where progress could be made: tightening border security between Mexico and Guatemala; the Mexican government holding U.S. asylum-seekers on the southern side of the border while their claims are adjudicated; and tougher action against human traffickers and criminal gangs.

“Mexico should engage with us, and we wouldn’t have to take any additional steps,” White House press secretary Sarah HuckabeeSarah Elizabeth SandersBill Press: Mulvaney proves need for daily briefings White House correspondent April Ryan to moderate fundraising event for Buttigieg White House press secretary defends lack of daily briefings: Trump 'is the most accessible president in history' MORE Sanders told reporters on Friday.

A person familiar with the process told The Hill that the new tariff move was “a graduated approach with an immediate exit ramp if Mexico does the right thing.”

Trump has said that the tariffs would be introduced at a rate of 5 percent on June 10 and would then rise by 5 points at the beginning of each subsequent month to a ceiling of 25 percent. The U.S. imported $346.5 billion in goods from Mexico in 2018, according to the USTR, and the country recently became the U.S.’s largest trading partner.