O que é este blog?

Este blog trata basicamente de ideias, se possível inteligentes, para pessoas inteligentes. Ele também se ocupa de ideias aplicadas à política, em especial à política econômica. Ele constitui uma tentativa de manter um pensamento crítico e independente sobre livros, sobre questões culturais em geral, focando numa discussão bem informada sobre temas de relações internacionais e de política externa do Brasil. Para meus livros e ensaios ver o website: www.pralmeida.org. Para a maior parte de meus textos, ver minha página na plataforma Academia.edu, link: https://itamaraty.academia.edu/PauloRobertodeAlmeida

Mostrando postagens com marcador guerra comercial. Mostrar todas as postagens
Mostrando postagens com marcador guerra comercial. Mostrar todas as postagens

terça-feira, 13 de agosto de 2019

A nova Guerra Fria Economica: EUA (ou Trump) contra a China - Eswar Prasad (Brookings Institution)

Which country is better equipped to win a US-China trade war?

Soybean farmer Raymond Schexnayder Jr. holds soybeans from his farm outside Baton Rouge, in Erwinville, Louisiana, U.S., July 9,2018.   Picture taken July 9, 2018.   REUTERS/Aleksandra Michalska - RC1BAC1CF2F0
The United States and China are clearly on a collision course. Chinese companies abscond with intellectual property, and President Trump introduces tariffs on Chinese goods; President Xi Jinping responds with his own levies, so Trump adds more. China allows the value of its currency to fall, and the United States brands it a currency manipulator. We are now on the verge of all-out economic warfare.
These are the world’s two largest economies, and the collapse of trade between them would hardly bring either one to a grinding halt. But the combatants are not evenly matched. China might seem in a better position to cope with a trade war, since it is a heavily managed economy and the government squashes political resistance. Yet its every maneuver carries enormous risks. Meanwhile, Trump, who manages a durable and flexible economy, is not exactly seeking victory for the American way of doing business. His approach, in some ways right out of Beijing’s playbook, would make our economy quite a bit more like China’s.
The breakdown in trade between the two countries is already causing pain in both economies, as soybean farmers in the Midwest and Chinese textile exporters in Guangzhou can attest. The battle will intensify if rising tensions close off investment flows and dampen the movement of tourists and students between two countries. But the U.S. economy is about 50 percent larger than China’s, and is less dependent on trade, so its prospects look better. And China exports more to the United States than it imports from the United States (a fact that clearly riles up Trump and was a key instigator for the trade war). So the near-term pain will be greater for China.
But Beijing does have some advantages. One is the structure of its (mostly) command economy, which is dominated by state enterprises. The majority of banks in China are also state-owned, making it easy for the government to generate a surge of cheap credit—and the subsequent investment that boosts growth. The second advantage is the structure of China’s political system, in which dissent is easier to shut down and bad news about the trade war can be filtered out.
Still, even a state-dominated economy with many economic weapons has to be cautious about which ones it uses; some of them could backfire badly.
One of China’s greatest weapons in a trade war is its ability to disrupt the work of American companies that want to sell into China’s enormous and fast-growing markets or that use China as part of their global supply chains. But other foreign companies and investors could also begin to see China as an unpredictable and volatile business environment, unconstrained by the rule of law. This would hurt China’s plans for modernizing its economy with the help of foreign investments and foreign technological and managerial expertise.
China could also further cheapen the value of its currency, the renminbi, to offset U.S. tariffs. Here, too, the government faces constraints. Fear of a major devaluation could cause foreign investors to pull their money out of China, and domestic investors might follow. This happened in 2014-15, when a modest government-orchestrated devaluation set off panic-driven capital outflows in anticipation of further depreciation.
Moreover, even an autocratic government cannot count on getting carte blanche from its people. Xi is not immune to domestic political pressures and must carefully manage the tricky balance between using nationalist sentiments as a rallying cry and actually delivering good economic performance.
Theoretically, China can stimulate a flagging economy by ordering a burst of investment that boosts gross domestic product growth in the short term. But this would probably generate more bad loans in an already fragile banking system. A protracted trade war would also halt even modest momentum toward market-oriented reforms, a putative objective of the Chinese government. This would hurt the economy’s long-term growth prospects. And China’s plan to shift the focus of its economy from staid and inefficient state enterprises to high-productivity and high-value industries will fall short if it loses access to technology from the United States and other Western nations.
In some ways, Trump seems more constrained than Xi because of America’s democratic political system, its more laissez-faire economy and the limits on his executive power. But he, too, has some elements in his favor as he does battle with China. Trump has the advantage of managing an economy that is enormously flexible and resilient. And getting tough on China resonates not just with his political base but even with Democrats, many of whom have long called for aggressive U.S. action against Chinese trade and currency practices, even if they disagree with Trump on tactics.
Yet in exercising his power, he could end up making America’s economy a bit more like the state-dominated one operated by Beijing—and, in so doing, permanently damage the U.S. free market. To rescue the agricultural sector from the consequences of the trade war, Trump has already dispatched $28 billion in government subsidies. He has also jawboned American companies to move their production bases back to U.S. shores, rather than letting them make their own commercial decisions. Trump has even pressured the Federal Reserve, whose independence is seen as sacrosanct, to lower interest rates and suggested that the Fed should help drive down the value of the dollar. With such moves, he risks undermining the true strengths of the United States: the institutions that make the U.S. dollar and the American financial system so dominant.
What’s worse, Trump suggests that the rule of law is up for negotiation. After imposing sanctions on Chinese technology companies such as ZTE and Huawei for running afoul of U.S. rules, he hinted that those sanctions could be negotiated away as part of a trade deal. He is fighting a Pentagon process that could award a defense contract to Amazon, whose CEO (who owns The Washington Post) has criticized him.
China has made its lack of independent institutions a source of strength in dealing with external economic aggression. In that model, Trump sees something Washington should copy—and seems ready to abandon what makes the United States special. This truly is a trade war with no winners.

sexta-feira, 9 de agosto de 2019

Guerra cambial: de volta aos anos 1930? - George Magnus

Yuan’s Slide Is Gold Standard Moment for China
The decision to let the currency weaken beyond 7 to the dollar echoes previous turning points of historic global significance.
George Magnus
Straits Times, Singapura – 9.8.2019

China allowing the yuan to slide below 7 to the dollar is a watershed moment for currency markets that's symbolically equivalent to the U.S. and other countries abandoning the gold standard in the interwar period, or the collapse of the postwar Bretton Woods system of fixed exchange rates four decades ago. The implications for the global economy are equally significant.
The world’s major currencies aren’t tethered in the way they were in those periods, but gold and Bretton Woods both served as anchors for the world’s monetary system, and their demise reflected the economic and political disarray of their times. Today, the yuan is semi-pegged to the U.S. dollar. The arrangement serves as an anchor for China’s financial system, now the world’s largest by assets; for many currency systems in Asia and around the world; and for U.S.-China economic and financial relations.
If that mainstay ruptures, it’s liable to set off chain reactions inside and outside China. That’s why the loosening in currency policy by the People’s Bank of China this week, while it may seem unremarkable for most people, is an important development.
It may be too early to assert that China is “weaponizing” the yuan in the deepening trade war with the U.S., especially because the central bank’s actions still appear measured and moderate. Nevertheless, the assumption that keeping the yuan rate stable against the dollar was part of the complex politics surrounding the trade negotiations no longer holds. President Donald Trump’s decision to impose a 10% punitive tariff on a further $300 billion of Chinese imports – perhaps a waymark to 25% at a later date – looks to have changed the calculus. 
China can no longer engage in tit-for-tat tariffs because it imports so much less than it sells to the U.S. Its only options are to target American companies using its own “ entity list” of firms deemed to damage Chinese interests; make life more difficult for them in China; and ultimately to depreciate the currency. The political decision to sanction the move suggests China has weighed the costs of a weaker currency and decided they are less than those of an impasse in talks and continued economic harm from tariffs.
A cheaper yuan, or renminbi, will help Chinese exporters compete in the U.S. and global markets, offsetting the impact of tariffs to some extent. In the short term, it will help to prop up China’s fragile growth momentum. 
The negative implications are more severe, though. A weaker currency will hurt Chinese consumers, who will pay more for imports, and hinder the intended shift in the economy to a more consumer-oriented structure. It will raise the credit risk and vulnerability of Chinese property and other companies that have been borrowing increasing volumes of dollars in the past few years. It will almost certainly encourage residents to try to evade capital controls and place money offshore. This happened in 2015-16 too, though the strengthened capital controls regime since then is likely to be more effective for the time being.
Beyond China, the yuan’s slide is likely to trigger competitive currency depreciations, especially in countries that are part of its Asian supply chains and those that compete with Chinese products. The dollar will be the de facto beneficiary, often a sign that the world economy is faltering. A weaker renminbi will hurt U.S. producers and exporters at a time when the American economy is softening. It will also reduce the foreign earnings of U.S, firms, and as a result, the equity market.
The political significance may be at least as great. The importance of the renminbi, literally the “people’s money,” to China is no less than that of the dollar to America or sterling to the U.K. China’s economic narrative places much pride in, for example, its $3 trillion stock of foreign-currency reserves, and attaches extraordinary status to the role and function of the renminbi. The decision to put the stability of the currency at risk won’t have been taken lightly. 
As far as economic activity is concerned, the yuan’s move through 7 almost certainly reflects concern over the weaker trajectory of the economy, in which trade plays a relatively small direct role, though a cumulatively more important one. It’s not only the effect of tariffs that filters through China’s economy, but the loss of productive capacity as a rising number of firms move supply chain operations, and jobs, outside the country. A major Chinese investment bank recently suggested the industrial sector has lost about 5 million jobs in the last year, almost half of which are attributable to the trade war. 
The yuan’s move appears to reflect frustration at the lack of progress in trade talks, and specifically the refusal of the U.S. side to remove tariffs as a condition for any Chinese concessions. The depreciation will be managed for the time being, but it’s unlikely to stop. With time, the rapid expansion of financial assets in China, combined with political pressures, will probably lead to a much greater decline.
By then, it won’t be only financial markets that are paying attention. The yuan’s path may help shape the future of geopolitical and economic arrangements around the world. (Bloomberg)

sábado, 1 de junho de 2019

Editorial do Washington Post sobre as tarifas contra o México por causa dos imigrantges ilegais

Trump’s tariffs on Mexico are the kind of erratic act the Constitution is meant to prevent

THE MASSIVE influx of Central American migrants across the U.S.-Mexico border is a real problem, to which President Trump’s sudden threat of escalating tariffs against Mexico is a bizarre and wildly inappropriate response. Not only does it attribute, spuriously, all the blame for the migrant flow to Mexico, but it also takes that friendly country’s economy hostage — unless and until “the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment,” as the president put it in a statement Thursday night. U.S. consumers and companies will suffer potentially major collateral damage, all for the sake of a dispute that has nothing to do with trade.
Mr. Trump undermines goodwill he had recently reestablished with Mexico by lifting steel and aluminum tariffs; this was done to promote ratification of the new U.S.-Mexico-Canada trade agreement by Mexico and Canada. Now the treaty’s prospects for passage will again plummet, both in Mexico City and in Congress. Mr. Trump has just shown — again — why it is so hard for any counterpart, domestic or international, to work with him.
If Mr. Trump actually carries out the ultimatum by his self-imposed June 10 deadline, the American consumer will pay to the tune of a few hundred million dollars at first, and $3 billion if Mexico hasn’t satisfied him by October, thus triggering maximum tariffs of 25 percent. And that is for fresh produce alone; projected over the 2018 total of imports from Mexico of $372 billion, including the vast automotive supply chain, the maximum cost could be $93 billion. Mr. Trump is not thinking in cost-benefit terms but rather casts the “lawless chaos” and “mass incursion” as “an emergency and extraordinary threat to the national security and economy of the United States.”
The latter phrasing is necessary to trigger the International Emergency Economic Powers Act, a law that has empowered presidents to act against adversaries such as Iran — and which Mr. Trump now stretches to threaten economic sanctions against our second-largest trading partner. He has apparently done so without the congressional consultation the statute calls for “in every possible instance.”
A tax increase imposed by sudden executive fiat, in pursuit of an irrational conflict with a neighbor and close ally, counterproductive for the White House’s own declared priorities — this epitomizes the kind of erratic presidential rule the Constitution intended to prevent. We are experiencing the downside of past legislation delegating “emergency” international economic power to the executive branch; Congress must, on a bipartisan basis, take it back.
That is a long-term project. In the near term, it’s up to more level-headed parties to try to thwart Mr. Trump. To his credit, Mexican President Andrés Manuel López Obrador has responded with relative restraint, refusing to capitulate but also dispatching diplomats to Washington. The Republican chairman of the Senate Finance Committee, Charles E. Grassley of Iowa, called Mr. Trump’s threat “a misuse of presidential tariff authority” and urged him to pursue alternatives. That’s a start, but reining in this latest fit of presidential pique may take more principled resistance from Republican lawmakers than they have previously shown.

Com tarifas, Trump quer transformar México em uma Cuba ou Coreia do Norte - Diogo Schelp (Uol)

Com tarifas, Trump quer transformar México em uma Cuba ou Coreia do Norte

Fronteira
O presidente americano Donald Trump visita a fronteira com o México 
(Kevin Lamarque/Reuters)

O "arte" da negociação do presidente Donald Trump consiste em fazer chantagens. Primeiro, ele coloca um bode na sala, depois cobra um preço alto para tirá-lo do lá. É o que o americano está fazendo mais uma vez ao anunciar que vai elevar as tarifas de importação de produtos mexicanos, até que o país vizinho adote alguma medida para impedir o fluxo de emigrantes para os Estados Unidos.
Trump anunciou pelo Twitter, nesta quinta-feira, 30, que vai impor uma tarifa de 5% sobre todos os produtos importados do México a partir de 10 de junho. No dia 1º de julho, a taxa de importação vai subir para 10%. A partir de então, será elevada em 5% a cada mês, até atingir 25%.
Muito já se falou sobre o impacto que essa medida vai causar não só na economia mexicana, mas também na americana. O México é o maior parceiro comercial dos Estados Unidos e o setor automobilístico americano tem um relação de absoluta interdependência com o país latino.
Mas há outro aspecto relevante nessa história: ela revela que Trump não compreende o dever de responsabilidade que um governo democrático tem por seus cidadãos. A não ser em casos de pessoas suspeitas de terem cometido crimes ou que devem pensão alimentícia, países democráticos jamais proíbem seus cidadãos de emigrar. Isso não é apenas moralmente inaceitável. É um contra-senso.
Nas democracias, os cidadãos elegem os governantes para que esses defendam seus direitos, inclusive, se preciso for, diante de pressões externas. O governo mexicano não pode sobrepor os interesses americanos aos interesses do povo mexicano, e isso inclui a liberdade de cruzar a fronteira para os Estados Unidos. Os guardas mexicanos não podem impedir seus conterrâneos de tentar a travessia. Cabe às autoridades americanas impedi-los de entrar, se não tiverem visto.
Trump quer que o governo mexicano faça algo que apenas ditaduras como as de Cuba e da Coreia do Norte fazem: aprisionar suas populações dentro de suas fronteiras. Não é à toa que Cuba é chamada de ilha-prisão.
Curiosamente, a incapacidade de Trump de entender esse aspecto dos governos democráticos é compartilhada pela família Bolsonaro. O deputado federal Eduardo Bolsonaro — o presidente da Comissão de Relações Exteriores da Câmara que tem atuado como um chanceler paralelo do governo de seu pai, o presidente Jair Bolsonaro — chegou a afirmar em março, durante uma viagem aos Estados Unidos, que os brasileiros que vivem ilegalmente no país são "uma vergonha". Ora, um princípio básico da diplomacia é que a política externa serve para proteger o interesse nacional de um país. Isso inclui defender os direitos de seus cidadãos fora de suas fronteiras, inclusive o direito de livre circulação.
Do ponto de vista da diplomacia brasileira, não existe brasileiro "ilegal". O que existe são brasileiros que estão vivendo no exterior sem permissão das autoridades locais e que, assim mesmo, têm direito a todo o apoio consular que o Estado brasileiro é capaz de lhe prestar. Aos olhos de seu governo, esses brasileiros não podem ser considerados infratores.
Mas voltando ao caso mexicano. O que o México pode fazer — e já vem tentando — é restringir o fluxo de emigrantes vindos de outros países da América Central e do Sul que usam o território mexicano como corredor para chegar à fronteira americana. Em 2017, do total de imigrantes detidos pelas autoridades americanas tentando entrar nos Estados Unidos ilegalmente, 130.000 eram mexicanos e 180.000 vinham de outros países. Desde o ano passado, as forças mexicanas instalaram checkpoints ao longo de todas as estradas que levam para o norte. Os imigrantes sem visto vindos de outros países são detidos e enviados de volta.
Os Estados Unidos podem até querer que o México faça mais para barrar os imigrantes originários de terceiros países — ainda que isso imponha aos mexicanos a tarefa de fazer o serviço sujo, e altamente questionável, que os americanos não conseguem cumprir. Mas o governo mexicano não pode impedir seu próprio povo, que representa quase metade do fluxo migratório, de cruzar a fronteira, sob pena de se transformar em uma Cuba.

A destruicao do sistema multilateral de comercio por um presidente louco - Catherine Rampell (WP)

Como eu dizia, as sobretaxas tarifárias impostas por Trump são ILEGAIS: ele não tem o poder de impor essas tarifas contra quaisquer países.
Quando o Congresso americano vai agir?
Paulo Roberto de Almeida


Just a few of the reasons that Trump’s Mexico tariffs are deeply stupid

The Washington Post, June 1, 2019

Amid calls for impeachment, a persistently underwater approval rating, subpoenas for financial records and an ever-growing list of scandals, the strong economy is pretty much the only thing President Trump has going for him right now. It’s his best shot at reelection.
And for some reason he seems keen on destroying it.
On Thursday evening the Trump administration announced that it would impose a new 5 percent tariff on Mexican imports, ratcheting up in increments to 25 percent by Oct. 1. This is allegedly to pressure Mexico to stop the flow of immigrants coming to the United States.
This decision is so mind-bogglingly stupid, it’s hard to keep track of all the reasons it’s dumb. Here are a few.
1. Americans are paying these tariffs. We already have two studies by teams of top-notch trade economists who have found that the costs of Trump’s earlier tariffs are being passed along to American businesses and consumers. An update of one of those studies pegged the cost of tariffs announced before Thursday (including the most recent escalation on $200 billion of Chinese goods) at $831 per U.S. household. It seems reasonable that this latest round of tariffs on Mexican goods will also be largely absorbed by Americans.
Industry groups, including those for produce and retail, have put out statements warning about the cost to consumers of these tariffs.
2. This will seriously screw up supply chains and hurt American companies— including American companies that need Mexican parts to make their own products that get sold here or exported abroad.
Mexico recently became our No. 1 trading partner. Two-thirds of our imports from Mexico are intra-company trade (i.e., a firm trading with itself across the border).
The auto industry is especially vulnerable; of U.S. auto exports, about 35 percent of the value-added comes from imported inputs, according to Deutsche Bank Securities chief economist Torsten Slok. Note also that the U.S. auto industry is already in trouble. Announced layoffs for the first four months of this year in autos are the highest since 2009, according to Challenger, Gray & Christmas.
3. We don’t know the full economic cost of the tariffs, but it would be painful for the United States. Two years ago, a research and consulting firm calculated an estimate for the costs of a similar (20 percent) tariff on Mexican imports: “Over three years, the bill comes to $286 billion in lost value to the U.S. economy and a loss of 755,000 American jobs. Two-thirds of those job losses would be at the expense of low- to medium-skilled workers.”
4. It’s not clear the tariffs are legal. The White House said its legal justificationfor the tariffs is the International Emergency Economic Powers Act. This 1977 law is mostly related to sanctions; it has never been used for tariffs, according to the Congressional Research Service. Some trade lawyers have suggested that the law does not give the president power to unilaterally impose trade duties.


in which a foreign country or person has interest—like freezing assets or prohibiting FDI. None of that sounds like imposing a tariff to me. Because tariffs clearly fall under Congress' powers in the Constitution, Trump can only impose tariffs if Congress clearly delegated
power to do so. I don't read IEEPA as a clear delegation of power to impose tariffs. Probably why no President has ever used IEEPA to impose tariffs. The other laws Trump has used--232 and 301--clearly speak of "import restrictions" and "duties". IEEPA does not.

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5. Mexico does not have power to do the thing Trump seems to be asking the country to do. He’s asking Mexico to block people from Central America from crossing into the United States to exercise their internationally recognized legal right to seek asylum.
6. There is no plan. There was never a plan. Even acting White House chief of staff (and Office of Management and Budget director, and apparently new Labor Department overlord) Mick Mulvaney acknowledged this in a call with reporters. When asked what it would take to remove the tariffs, he said the decision would be “ad hoc.”
7. This new self-inflicted trade-war wound gives us less leverage in negotiating a new trade deal with China (and the European Union and Japan, both of which we’re also simultaneously trade-warring with). The tariffs will damage our economy and encourage already suffering trade-dependent sectors — including agriculture and manufacturing — to place more pressure on the administration to reach a deal as soon as possible. Basically, it makes our stated willingness to absorb a little more trade-war-related pain less credible, since we’ve absorbed so much pain already.
8. It will also damage our ability to negotiate with China (and the E.U. and Japan) because it proves, once again, that Trump can’t be trusted to keep his word, including in the form of a signed international agreement. 
Recall that Trump had previously said that his global steel and aluminum tariffs would stay on our friends in Canada and Mexico until a new North American Free Trade Agreement was signed. But after it was signed last fall, he still didn’t remove the tariffs. Finally, two weeks ago, under pressure from lawmakers, he did remove them ... only to turn around and announce fresh across-the-board tariffs on everything from Mexico.
Mexico negotiated the new NAFTA in good faith, and then was punished for it. Why would anyone ever make a deal with this president, one that required literally any concessions, given this track record?
9. The decision to impose tariffs — and thereby harm red-state farmers and manufacturers — could cause a rift with the Republican lawmakers who have been protecting him. To be sure, they’ve supported him through the trade wars so far. But at some point even they might break, especially if they think another trade war front could jeopardize their own reelection chances.
10. If Trump does indeed manage to wreck the Mexican economy, that would likely increase the flow of immigrants trying to cross the border into the United States. When the Mexican economy is lousy, after all, demand to come to the United States rises.
Of course maybe Trump is counting on making the U.S. economy so lousy too that it’s no longer an attractive destination.
Read more:

O que fazer contra um presidente maluco? O Congresso dos EUA precisa conter o alucinado (WP)

O presidente adota medidas ilegais, não apenas contra o direito internacional e tratados multilaterais, regionais e bilaterais de comércio, mas também contra a própria Constituição americana, que atribui ao Congresso a última palavra em matéria de política comercial.
Por que o Congresso, os republicanos sobretudo, mas os democratas também, renunciaram a atuar segundo seus próprios mandatos constitucionais constitui um segredo até aqui não tratado pelos especialistas?
Como um presidente atuando fora de seus limites legais consegue impor sobretaxas comerciais aos parceiros dos EUA sem que o Congresso atue?
Paulo Roberto de Almeida

Trump defies close advisers in deciding to threaten Mexico with disruptive tariffs

The Washington Post, June 1, 2019

President Trump, confronted with the latest surge of migration that threatens his tough-on-the-border image, was ready to launch his newest plan — across-the-board tariffs on Mexican goods, likely to wound the healthy economy and trigger protests from parts of his own party. 
But during a Wednesday night huddle inside the Oval Office, Trump was running into a roadblock: his own advisers.
Calling in from his travels in the Middle East, presidential son-in-law Jared Kushner argued against imposing unilateral tariffs, warning that the move could imperil the prospects of ratifying a new trade deal with Mexico and Canada, according to officials familiar with the meeting. Kushner, a senior White House adviser, insisted that he could still work directly with Mexico to resolve the burgeoning migration crisis. 
In the Oval Office with Trump, U.S. Trade Representative Robert E. Lighthizer also lobbied against the tariffs, similarly concerned that the drastic threat against the United States’ third-largest trading partner would upend the fragile trade agreement, which still requires Congress’s blessing. 
But Trump was unmoved by the arguments and repeatedly said Mexico had to do more, one person with knowledge of the meeting said. The tariffs, he declared, were going to be announced no matter what. 
Roughly 24 hours later, Trump would go public with his latest attempt to stop the migration of Central Americans arriving in record numbers at the southern border, seeking to punish Mexico by gradually increasing tariffs on the entire universe of its goods.
This account of Trump’s decision to open a new front in his battles over immigration and trade — and the ensuing fallout — is based on interviews with 14 White House officials, lawmakers, congressional aides and others familiar with the issue, most of whom spoke on the condition of anonymity to discuss internal deliberations.
The tactic sowed disruption on multiple fronts Friday as top Mexican officials rushed to Washington to defuse the threat, the stock market tumbled on the news and administration officials offered little explanation of how increasing the prices of goods from Mexico would stop illegal immigration at the border, a goal that has eluded multiple administrations.
“He’s trying to solve a humanitarian situation by creating economic chaos,” said Congressional Hispanic Caucus Chairman Joaquin Castro (D-Tex.), whose state would be devastated in any trade standoff with Mexico. “He doesn’t have a coherent strategy for how to deal with any of this stuff.”
Still, the chorus of objections that enveloped the White House did little to discourage Trump, who was infuriated after more than 1,000 migrants from Central America surrendered early Wednesday to U.S. officials near El Paso. That development — on the same day that former special counsel Robert S. Mueller III delivered an in-person statement on the conclusions of his Russia investigation — marked the largest group of migrants taken into custody by U.S. border authorities in a single event. 
On Friday, Trump defended his threat, insisting that Mexico “has taken advantage of the United States for decades.” 
“Mexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem,” Trump tweeted as the pushback from Republican lawmakers and the business lobby continued to pour in. “Time for them to finally do what must be done!” 
Under the White House threat, the United States would implement a 5 percent tariff on all Mexican imports starting June 10 if illegal migration hadn’t stopped by then. That figure would rise to a 10 percent tariff on July 1 and then an additional 5 percent on the first day of each month for three months, maxing out at 25 percent on Mexican products until the country “substantially stops the illegal inflow of aliens coming through its territory.”
In public, Trump administration officials sought to defend the plan by pointing to the rising number of asylum seekers arriving at the southern border — a trend that shows no signs of reversing. The Department of Homeland Security projects that the month of May is on track to record the highest number of border apprehensions in more than a dozen years. 
“Let me [be] clear, the current situation is risking the lives of children every day,” acting homeland security secretary Kevin McAleenan said, calling for Mexico to take “significant action” to secure its own southern border. 
But privately, top officials were caught in an administration-wide scramble as aides continued to have meetings with Trump on Friday to try to persuade him to reverse course, two officials said.
The idea of enacting unilateral tariffs against Mexico had surfaced repeatedly in internal discussions — and seriously enough that the White House Counsel’s Office had already written a draft of the plan when Trump brought up the proposal again Wednesday, officials said. White House lawyers had been studying their legal options since Trump threatened to shut down the entire U.S.-Mexico border before backing down. 
The arguments against the tariffs — voiced internally by Kushner, Lighthizer and Treasury Secretary Steven Mnuchin — did little to dissuade Trump, and Kushner was asked to call Mexican officials to inform them of the impending threat.
After the Wednesday night meeting in the Oval Office, the tariff order was finalized by the White House counsel and the office of Stephen Miller, a senior White House adviser and immigration hard-liner who oversees domestic policy. 
But Thursday morning, it was unclear whether Trump would actually follow through, even as he hinted at a “big league” announcement on immigration before leaving Washington for an Air Force Academy address in Colorado. Other White House offices not included in the initial tariff discussions — such as the legislative affairs division and the office of the public liaison — learned as aides came into work Thursday that Trump was considering such an announcement. 
By the time a cadre of senior White House aides assembled for a 4:30 p.m. meeting Thursday, the decision to announce the tariffs was essentially finalized, even though it had appeared to be in flux for much of the day. Trump called in from Air Force One as he returned from Colorado and told the staff that he wanted the announcement put out immediately. 
Vice President Pence — traveling in Ottawa to meet with Canadian Prime Minister Justin Trudeau and promote the pending trade agreement — separately phoned congressional Republican leaders to inform them of the imminent announcement. The top Republican on the House Ways and Means Committee, Rep. Kevin Brady (Tex.), was told in advance, but Senate Finance Committee Chairman Charles E. Grassley (Iowa), who leads a powerful panel overseeing trade policy, was not, according to their aides. 
“The president didn’t blindside his own party,” White House press secretary Sarah Sanders said Friday. “If Republicans weren’t aware, then they haven’t been paying attention.”
From the driveway of the White House, Sanders continued, “Anybody in this country — or frankly, in the world — that says they’re surprised by this has been living under a rock and not paying attention.” 
Nonetheless, Trump told people around him that he was well aware that many Republican senators would not like the tariff threat. Indeed, White House legislative staffers were flooded with calls Thursday night, although they referred all the inquiries to the counsel’s office, according to two senior White House aides.
The objections were particularly pointed Friday from proponents of free trade such as Sen. Patrick J. Toomey (R-Pa.), but they also flooded in from border-state Republicans who have been reliable Trump allies but also are on the ballot in 2020. 
“While I support the president’s intention of stopping unchecked illegal immigration, I do not support these types of tariffs, which will harm our economy and be passed onto Arizona small businesses and families,” Sen. Martha McSally (R-Ariz.) said in a statement.
A spokesman for Sen. John Cornyn (R-Tex.) conveyed similar sentiments: “Senator Cornyn supports the President’s commitment to securing our border, but he opposes this across-the-board tariff which will disproportionately hurt Texas.”
House Democrats began considering legislative remedies aimed at halting imposition of the tariffs, although one leadership aide said they needed more information from the administration to determine their options. 
Mick Mulvaney, the acting White House chief of staff, and economic staffers fielded a range of calls Friday from business leaders. In response, the White House told corporate officials to put pressure on Mexico, according to a senior administration official.
Meanwhile, the Mexican government scrambled to stave off the looming taxes, announcing that its delegation and U.S. officials will meet in Washington on Wednesday, with the sides led by Mexican Foreign Minister Marcelo Ebrard and Secretary of State Mike Pompeo.
“Trump loves tariffs. That’s fine, but this needs to end in policy wins,” said Republican donor Dan Eberhart. “The short-term pain needs to produce a long-term gain for America.”