Donald Trump predicted that tariffs on Mexican imports would take effect as planned next week, dashing hopes that an agreement could be reached on migration in the coming days despite growing criticism from some Republicans about his latest trade move.
“We are going to see if we can do something, but I think it’s more likely that the tariffs go on,” Mr Trump said during a press conference with Theresa May, the UK prime minister, in London. “And we will probably be talking during the time that the tariffs are on, and they are going to be paid.”
Last week, Donald Trump abruptly announced that Washington would impose levies on all Mexican goods unless it took more forceful action to contain migration to the US. The levies, initially set at 5 per cent, are due to kick in on June 10, touching off a scramble to reach a deal before then.
Mr Trump spoke as senior members of the Mexican cabinet fanned across the US capital this week to meet their American counterparts in an effort to resolve the diplomatic and economic stand-off between the two countries. The possibility of escalating tariffs on trade in North America has clouded economic prospects for both countries and rattled global markets.
Speaking earlier on Tuesday at the Mexican embassy in Washington, foreign minister Marcelo Ebrard, who is leading the talks on the Mexican side, was more optimistic about a deal and said his country was preparing a new offer to present to the Trump administration.
“We will make an effort to reach an agreement. It’s do-able and desirable. [The chances are] 80/20 in favour of achieving one,” Mr Ebrard wrote on Twitter.
Mike Pence, US vice-president, will chair talks between the two countries to be held at the White House on Wednesday, a spokesperson said. Before that, top US and Mexican officials responsible for agriculture, commerce, homeland security and trade have held preparatory meetings to see if the dispute could be resolved. On Tuesday Jesus Seade, Mexico’s chief North American trade negotiator, was due to meet with Robert Lighthizer, the US trade representative.
“We think there is going to be a negotiation, and we think we are going to have a common encounter point, common ground,” Mr Ebrard said. “Mexico is already making a big effort. We share the concern and we think the increase in migration that we are experiencing has a solution.”
Mr Ebrard did not specify what concessions Mexico was prepared to make on migration in order to appease Mr Trump — who decried the new arrivals from America’s southern border as an “invasion” and “onslaught”. Mr Ebrard declined to lay out Mexico’s plans for possible retaliation in the event that no deal was reached, but said Mexico would be “ready” for that scenario.
“We are looking for an approach that is dignified and effective,” he said. If no agreement is reached, the US administration has said that tariffs will gradually increase over the course of the summer, reaching a high point of 25 per cent on all Mexican goods by October.
While this would inflict a big blow to the Mexican economy, which is highly dependent on exports to the US, it would also hurt the US economy, whose supply chains are highly integrated with Mexico.
Among Mexico’s allies in the stand-off with the Trump administration are US business groups that strongly oppose the tariffs threatened by the White House — as well as some Republican members of Congress who are considering a rare vote to try to block the tariffs in defiance of Mr Trump, according to the Washington Post.
Mr Trump dismissed the chances of a revolt from his own party. “I don’t think they will do that. If they did it’s foolish.”
Several senior Republicans nevertheless spoke out against the administration’s latest tariff threat on Tuesday.
“There is not much support in my [Republican] conference for tariffs,” Mitch McConnell, the Republican senate majority leader, said. “We’re not fans of tariffs.”
Rand Paul, the Republican senator from Kentucky who has disagreed with the White House and majority of the Republican caucus in the past, said he believed that there was a significant enough uprising among Republicans to spur a disapproval vote on Mr Trump’s tariffs.
“I really do think there may be enough numbers of people who think that we shouldn’t be allowing one person to make this decision that we actually may have enough to override a veto,” Mr Paul told CNN. A two-thirds majority is required in both the House of Representatives and Senate to override a presidential veto, should Mr Trump use one.
Other Republican senators, however, were more circumspect, holding out hope that a new trade deal could be reached with Mexico.
Rob Portman, a Republican senator from Ohio, said it was “likely” the implementation of tariffs would spur a vote of disapproval within the US Senate but added that it was unclear whether there were enough senators to block a presidential veto.
“I hope we don’t go down that road. I think we need to avoid it. I think we can, and my hope is that’s what will happen [Wednesday],” Mr Portman told CNBC.