American Consequences - June 2019


Nobody knows how the migrant surge will end, or if it will end.

– may be at their all-time zenith. Assuming Mexico even wants to help Trump, it’s not clear its domestic politics will support collaboration with the Americans to stop the caravans. But there are many ways this could go south, so to speak. Mexico could fail to meet its obligation – or Trump’s expectations – on emergency measures to hold back the migrant tide, triggering a series of tariff raises that will affect a whole range of businesses on both sides of the border. That would have a lot more bite than the overhyped “trade war” with China has to date. If tariffs are implemented, nobody really knows what their price would be. The long- term economic implications of Trump’s latest gambit will have to play out. Mexico is our third-largest trading partner, with more than $550 billion exchanging hands in 2018. The tariffs Trump wanted to hit Mexico with were set to escalate each month by 5% after June. The 2020 election factors into all of this as well. The single unassailable feature of Trump’s first three years has been a strong and growing economy. By the numbers, unemployment, GDP, and the stock market continue to be talking points that pro-Trump voices can unleash on their opponents at will. If Trump adds a relatively minor tariff spat with China onto a much bigger trade street fight with Mexico, spooked markets could become a weakness in the polls that hurt the White House next November. On the other hand, if Trump manages to shut down the Central American migrant flow through his own skills of negotiation, it

would finally give his re-election campaign a positive story to tell on immigration. The current occupant of the Oval Office won the presidency in no small part because of his hard-line immigration stance. That lawlessness and bureaucratic chaos currently reign at our southern border is not a good look for the “build the wall” president. Tariff threats that lead to Mexican government cooperation would ease some of the base’s concerns on this score and allow some undecided voters to tell themselves, “Maybe he can fix it with four more years.” Nobody knows how the migrant surge will end, or if it will end. The courts have been routinely shutting Trump down with universal injunctions that are as legally flimsy as they are politically obvious. Trump tries to reverse Barack Obama’s DACA decision, and a federal judge stops him. Trump wants to set up a “safe third country” agreement for migrants in Mexico, and another federal judge stops him. Between the judiciary and the Democrats, sometimes it must feel to Trump that he’s a president stripped of his predecessor’s powers. In The Art of the Deal , Trump (or rather, his ghostwriter) wrote that “the worst of times often create the best opportunities to make good deals.” Yes, as humans have known for millennia, a crisis is an opportunity. The border is currently in crisis. We will soon see if Trump takes advantage of it, or if it takes away his second term.


June 2019

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