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Mexico, U.S. business groups urge Trump to back down on tariff threat

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Mexico, U.S. business groups urge Trump to back down on tariff threat

MEXICO CITY (Reuters) – Mexico’s president and the top U.S. business lobbying group called on President Donald Trump to back down from a threat to impose punitive tariffs on Mexican imports, in a dispute over migration that could shock Mexico’s economy.

Trump said he will introduce the tariffs on June 10 if Mexico does not halt the flow of illegal immigration, largely from Central America, across the U.S.-Mexican border, battering Mexican financial assets and denting global stocks.

The ultimatum from Trump is the biggest foreign policy test to date for Mexican President Andres Manuel Lopez Obrador and a tall order for Mexican security forces struggling not only to combat migrant flows but also to fight a record level of gang violence and homicide.

Mexico’s economy, which is heavily reliant on exports to the United States, shrank in the first quarter and would reel under U.S. tariffs which could reach as high as 25% under Trump’s plan.

In his six months in office, veteran leftist Lopez Obrador has consistently sought to deflect the U.S. president’s barbs and avoid embroiling himself in a confrontation.

He predicted that Trump, who is also engaged in a worsening trade war with China, would rectify his demand.

“I tell all Mexicans to have faith, we will overcome this attitude of the U.S. government, they will make rectifications because the Mexican people don’t deserve to be treated in the way being attempted,” Lopez Obrador told reporters.

In April, Trump took a step back from an earlier threat to close the southern border to fight illegal immigration, under pressure from companies worried that a shutdown would cause chaos to business.

Global equities tumbled and safe-haven sovereign bonds surged Friday after Trump’s unexpected threat added to fears that escalating trade wars will push the United States and other major economies into recession.

The influential U.S. Chamber of Commerce business group is looking at ways to challenge Trump’s tariff move against Mexico, including legal options.

“We have no choice but to pursue every option available to push back,” Neil Bradley, the group’s executive vice president and chief policy officer, told reporters.

Other industry groups also criticized Trump’s threat, saying it would cost American businesses, farmers and consumers who have already been bearing the brunt of the separate, lingering U.S. trade dispute with China.

“These proposed tariffs would have devastating consequences on manufacturers in America and on American consumers,” Jay Timmons, president of the National Association of Manufacturers, said in a statement.

Auto trade organizations expressed concern a tariff war with Mexico would undermine efforts to win U.S. congressional approval for the new United States-Mexico-Canada Agreement, which is meant to replace the North American Free Trade Agreement.

STEEP TARIFFS

Trump, who has embraced protectionism as part of an “America First” agenda aimed at reshaping global trade, ignited fears in Mexico and on global financial markets on Thursday when he announced he would ratchet up tariffs on Mexico “until the Illegal Immigration problem is remedied.”

The plan would impose a 5% tariff on Mexican imports starting on June 10 and increase monthly, up to 25% on Oct. 1.

Such levies would deliver a heavy blow to Mexico’s economy, which is underpinned by exports to the United States of goods from avocados and tequila to televisions and cars made by companies such as Ford Motor Co and Nissan.

Mexico sends around 80 percent of its exports to the United States and is one of America’s top trading partners in goods.

Mexico’s main stock index was down 1.3% on Friday after opening the session sharply lower, and the peso currency was down more than 2.5% against the dollar.

Mexico’s President Andres Manuel Lopez Obrador attends a news conference at the National Palace in Mexico City, Mexico, May 31, 2019. REUTERS/Henry Romero

Foreign Minister Marcelo Ebrard, who was due to travel to Washington on Friday, on Twitter called Trump’s treatment of Mexico “unfair” and said the tariffs made “no economic sense for anyone.”

But Trump sought to turn up the pressure again on Friday.

“Mexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem. Time for them to finally do what must be done!” Trump wrote on Twitter.

Trump vowed frequently during his 2016 election campaign to make Mexico pay for construction of a wall on the U.S.-Mexican border to curb illegal immigration but successive Mexican governments have firmly rejected that idea.

The U.S. Congress also refused a request from Trump for $5.7 billion to help build the wall, prompting him to declare a national emergency and try to divert funds from other areas of the U.S. government. The issue is now in the courts.

Trump and his fellow Republicans say something needs to be done to stem the biggest migrant surge on the southern border in a decade.

U.S. officials say 80,000 people are being held in custody, with an average of 4,500 mostly Central American migrants arriving daily, overwhelming the ability of Border Patrol officials to handle them.

A senior White House official said Trump was particularly concerned that U.S. border agents apprehended a group of 1,036 migrants illegally crossing the border from Mexico on Wednesday. Officials said it was the largest single group since October. Before unveiling the tariff threat, Trump posted a video purporting to be of the crossing on his Twitter feed.

Since taking office in December, Mexico’s Lopez Obrador has urged Trump to help him tackle migration by promoting economic development in Guatemala, Honduras and El Salvador, where most of the migrants apprehended on the U.S. border come from.

Pledging to exercise “great prudence” in seeking a resolution to the tariff dispute, the Mexican president said he did not want to involve the World Trade Organization for now.

Though Lopez Obrador again stressed the need for diplomacy on Friday, he has in the past offered pointed criticism of Trump over migration policy. He was adamant that he had the support of Mexicans living in Mexico and the United States.

FILE PHOTO: Trucks wait in a long queue for border customs control to cross into the U.S., at the Zaragoza-Ysleta border crossing bridge in Ciudad Juarez, Mexico April 27, 2019. REUTERS/Jose Luis Gonzalez

Lopez Obrador, who won election last year in a landslide, in 2017 likened Trump’s attitude towards migrants to Nazi Germany’s persecution of Jews.

In a letter responding to Trump’s announcement on Thursday, Lopez Obrador called Trump’s America First policy “a fallacy” and accused him of turning the United States into a “ghetto” that stigmatized and mistreated migrants.

Reporting by Dave Graham; Additional reporting by Stefanie Eschenbacher in Mexico City, Andrea Shalal, Steve Holland and Makini Brice in Washington; Writing by Alistair Bell; Editing by Paul Simao

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U.S. president confirms no withdrawal from security pact: Japan

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TOKYO (Reuters) – Japan’s top government spokesman said on Tuesday the United States has confirmed its defense treaty with Japan after a report suggested U.S. President Donald Trump considered withdrawing from the pact.

Bloomberg reported on Monday that Trump has recently spoken privately about withdrawing from the treaty as he is of the view that the pact treated the United States unfairly.

“The thing reported in the media you mentioned does not exist,” Yoshihide Suga told reporters in Tokyo.

“We have received confirmation from the U.S. president it is incompatible with the U.S. government policy,” he added.

Reporting by Kiyoshi Takenaka; editing by Darren Schuettler

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Winning ugly? Media hit Trump style over Iran, but sometimes it works

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Winning ugly? Media hit Trump style over Iran, but sometimes it works

It’s a headline that captures the establishment’s disdain for the president’s unorthodox style of governing.

“Trump’s Erratic Policy Moves Put National Security at Risk, Experts Warn,” says The Washington Post.

Never mind that the first three critics quoted — after a defense from Mike Pence on CNN — were Bernie Sanders, Kamala Harris and Cory Booker.

The other “experts” were two professors who were mildly critical and a lawyer who was supportive of Trump.

But the piece does get at a central question about this president in the wake of the aborted airstrikes against Iran, which he called off with 10 minutes to spare.

Does Trump preside over a messy and sometimes chaotic process? Of course. But sometimes that style gets results.

On Iran, for instance, many liberals liked that he pulled back on bombing over the downing of an unmanned drone, even as they say he extinguished a fire that he had started. (Maureen Dowd: “As shocking as it is to write this sentence, it must be said: Donald Trump did something right.”)

TRUMP SIGNS EXECUTIVE ORDER DELIVERING ‘HARD-HITTING’ SANCTIONS AGAINST IRAN

In negotiations, the president often makes a dramatic demand or threat, sparking a media and diplomatic furor over whether this time he’s gone too far — then hammers out a compromise and claims victory. It’s the style of a blustery New York real estate developer who’s always one minute from walking away from the table, transferred to the staid, tradition-bound world of Washington.

Over the weekend, Trump called off a wave of ICE arrests that was to begin on Sunday, which he said would begin deportations of “millions” of illegal immigrants. That set off the predictable uproar.

Trump, after a reported call with Nancy Pelosi, said he was delaying the arrests for two weeks to allow time for negotiations with the Democrats. Nobody seems to think a deal can be struck in so short a period, but Trump won points with his base by threatening the mass arrests and again drove the news agenda.

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The Post’s take: “Three policy turnarounds by President Trump this month have underscored his freewheeling governing style, an approach that some experts warn sends mixed messages and puts U.S. national security at risk …

“The results of Trump’s strategy on policy have been mixed at best — and few issues offer as complete a picture of the president’s habitual brinkmanship as his effort to overhaul U.S. trade policy.”

Remember when Trump threatened to close the Mexican border? The Beltway went ballistic. He didn’t.

PELOSI SAYS ‘VIOLATION OF STATUS’ NOT A REASON TO DEPORT ILLEGAL IMMIGRANTS

Then he threatened to slap tariffs on all Mexican products, beginning at 5 percent, if the country didn’t crack down on migrants fleeing Central America for the U.S. border. Lo and behold, Trump got a last-minute agreement. It’s hard to judge how concrete these steps are, and The New York Times said most of them had been previously agreed to, but the perception — or perhaps the reality — is that he got Mexico to move.

Trump even used the tough-talk tactics against Canada before finally hammering out a trade deal. Whether the tariffs imposed on China ultimately lead to an agreement is another question.

The point is that while Trump’s approach horrifies the traditionalists, he rarely carries out the well-publicized threats.

I see a link between the zig-zagging negotiating style and the repeated failures of Trump’s vetting operation. Rather than wait for full-fledged inquiries and background checks, the president announces who he wants to nominate — and often has to pull back.

That was painfully on display when acting Pentagon chief Patrick Shanahan had to withdraw over a violent family past that would have made clear he would be impossible to confirm. The same was true when the president had to drop his planned nominees to the Fed, Herman Cain and Steve Moore.

Axios obtained nearly 100 Trump transition vetting documents that clearly show the RNC and others were overwhelmed in trying to check on potential nominees. The documents show that ethical and management questions were raised about Scott Pruitt and Tom Price, who later had to resign their posts at EPA and HHS.

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As president, Trump has far more resources available to vet nominees, yet still rushes to name them before any real investigation.

This president isn’t going to win any awards for a tidy management process. But when it comes to military action and trade talks, he sometimes wins ugly.

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Emergency aid bill challenges Pelosi’s grip on Democrats

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Emergency aid bill challenges Pelosi’s grip on Democrats

A $4.5 million House bill aimed at providing more funding to migrant families detained at the U.S.-Mexico border is posing a challenge to Democratic House Speaker Nancy Pelosi’s grip on her party, as its liberal faction argue that the bill doesn’t go far enough while moderates worry that pushing for perfection will result in inaction at the border.

Calls for more funding at the border come amid reports that children detained entering the U.S. from Mexico are being held under harsh conditions. Department of Health and Human Services Secretary Alex Azar told Fox News on Monday that the situation at the U.S.-Mexico border is dire. Azar said HHS shelters are at capacity and the budget is not there to increase it unless Congress acts.

Customs and Border Protection Chief Operating Officer John Sanders told The Associated Press that Border Patrol stations are holding 15,000 people – more than three times their maximum capacity.

A $4.5 trillion House bill aimed at alleviating circumstances like these is up for a vote Tuesday, but liberal Democrats are calling for provisions to strengthen protections for migrant children, and challenge the Trump administration’s border policies. Democrats met on Capitol Hill with Pelosi late Monday to try and reach a compromise. The meeting reportedly eased some Democratic complaints.

PELOSI TELLS NEW YORK CROWD ‘VIOLATION OF STATUS’ NOT A REASON TO DEPORT ILLEGAL IMMIGRANTS

Asked before the meeting about her concerns that Democrats’ push for perfection might result in inaction at the border, Rep. Alexandria Ocasio-Cortez, D-N.Y., called it “a delicate situation.” Afterward, she appeared to have left the door open saying: “My main goal is to keep kids from dying,” before calling the humanitarian bill a “short-term” measure.”

But others weren’t swayed. Rep. Ilhan Omar, D-Minn., said after the meeting: “We cannot continue to throw money at a dysfunctional system. We are not just asking for simple changes to be made into this bill, but to go back to the drawing board and really address this from a humanitarian issue.”

The White House accused lawmakers in a letter earlier Monday of trying to undermine its efforts at the border, arguing that the House package does provide enough money to toughen border security or funds for Trump’s proposed border wall.

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Congress plans to leave Washington in a few days for a weeklong July 4 recess. While lawmakers don’t want to depart without acting on the legislation for fear of being accused of not responding to humanitarian problems at the border, it seems unlikely that Congress would have time to send a House-Senate compromise to Trump by week’s end.

Fox News’ Chad Pergram and The Associated Press contributed to this report.

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