- A group of Senate Republicans came out against President Donald Trump’s proposed tariffs on all Mexican goods following a closed-door meeting with administration officials Tuesday.
- The Republicans expressed concern over the long-term economic impacts of the tariffs, which are set to go into effect June 10.
- Speaking at a press conference in London, Trump said that the Republicans would be “foolish” to try to stop his tariffs.
Senate Republicans Go Against Trump
A group of Republican senators said Tuesday that they opposed President Donald Trump’s sweeping tariffs on all Mexican goods.
Last week, Trump announced in a tweet that the U.S. will impose a five percent tariff on all Mexican imports starting June 10, in order to put pressure on Mexico to reduce the flow of illegal immigrants coming into the country.
The White House later said in a statement the administration will increase the tariffs by another 5 percent every month, until they reach 25 percent in October, at which point they will “permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory.”
While Trump’s party has generally backed his immigration policies, numerous Republican senators made the tariffs a point of departure following a closed-door meeting with administration officials on Capitol Hill.
“There is not much support for tariffs in my conference, that’s for sure,” Senate Majority Leader Mitch McConnell (R-KY) told reporters after the meeting. “Our hope is that the tariffs will be avoided, and we will not have to answer any hypotheticals.”
Other senators who attended the meeting also expressed their discontent to reporters, like Sen. John Kennedy (R-LA), who called the tariffs “a mistake,” and Sen. Ted Cruz (R-TX), who told reporters, “There’s no reason for Texas farmers and ranchers and manufacturers and small businesses to pay the price of massive new taxes.”
Other Republican senators warned that they would try to block the tariffs, with some even arguing that they could get enough support among Republicans to get a veto-proof majority.
“The administration ought to be concerned about another vote of disapproval on another national emergency act, this time trying to implement tariffs,” Sen. Ron Johnson (R-WI) told reporters. “Tariffs are not real popular in the Republican Conference,”
Other Republicans backed this claim, like Senators Rand Paul (R-KY) and Kevin Cramer (R-ND).
Trump in London
The senators spoke out against the tariffs just a few hours after Trump told reporters in London that he had enough Republican support.
When asked by a reporter if he thought Republicans would block the tariffs, Trump said: “No, I don’t think they will do that, I think if they do, it’s foolish.”
To that point, there certainly are key Senate Republicans who have come out to back Trump.
In a tweet, Sen. Marco Rubio (R-FL) wrote that the president has “broad authority to control transactions with other nations if there is an unusual & extraordinary threat.”
Others agreed with Rubio’s sentiment. “I think Mexico could help us solve the crisis down at the border,” said Sen. Thom Tillis (R-NC). “What’s the tax on handling 80,000 additional illegal immigrants coming across the border, housing them, adjudicating them? You’ve got to look at the total cost of the prices.”
While Trump definitely has some support, experts have still described this as one of the biggest rebukes from Republicans during his time in office, which raises the question: why are Republicans so against the tariffs?
It all comes down to the economic impact.
Trump says the tariffs are a punishment for Mexico, but most economists say that the costs of the tariff will largely fall on U.S. businesses and consumers. This is due to the fact that tariffs are paid by companies that import products, and when U.S. businesses are required to pay the tax, that extra cost is then passed to consumers.
This economic concept is broadly supported by economists and experts from different schools of thought and does not fall into a category of liberal versus conservative economic theory.
“US tariffs are taxes on American households and businesses, so imposing them will always be an act of self-destruction,” Dan Ikenson, who leads trade studies at the conservative Cato Institute think tank, told Vox News.
“Trump may believe he can dictate demands because the smaller Mexican economy is more dependent on the US economy than vice versa, but make no mistake: Both economies would be hurt significantly by the tariff war being threatened.”
Additionally, economists also agree that because tariffs function like a regressive tax, the negative impacts are more likely to hit lower-income communities.
Besides consumers, the two biggest business sectors that will be hit are the auto industry and the agriculture sector. “Motor vehicles and motor vehicle parts accounted for one-third of the value of all US imports from Mexico, and much of that cross-border trade was in unfinished product,” said Ikenson.
“In other words, the factory floor spans the US-Mexican border, so imposing tariffs is akin to erecting a concrete wall through the middle of that factory.”
On Tuesday, Toyota Motor Corp told Reuters that the tariffs on Mexico could cost its major suppliers $1 billion. The tariffs will also not only create higher costs but also cause job losses as well.
According to a new report from the Perryman Group, an economic research firm, job losses would amount to nearly 406,000, and “the proposed tariffs would lead to an increase in direct costs of about $28.1 billion each year.”
Others also worry that the new tariffs will undermine the ongoing negotiations of the U.S.-Mexico-Canada Agreement (USMCA), which is the treaty that Trump intends to replace the North American Free Trade Agreement (NAFTA) with.
What Can Mexico Do?
While Trump remains adamant that he will implement the tariffs, Mexican officials remain more optimistic.
Mexico’s foreign minister, Marcelo Ebrard, is set to meet with Vice President Mike Pence in Washington to discuss the tariffs Wednesday, and Mexican authorities have said they are willing to cooperate but have pushed for talks rather than economic retaliation.
However, the question that remains is: how much can Mexico really do to stop the migrant flows? According to the Washington Post, Mexico has dramatically stepped up immigration enforcement recently.
The country has nearly tripled its monthly deportations since the beginning of 2019. Last month alone, they apprehended more than 22,000 unauthorized migrants, marking the highest monthly number in Mexicos history.
However, Mexico largely lacks resources to deal with the influx of migrants from Central America that travel to the country with hopes of getting asylum in the U.S. Mexico uses up a lot of its police and military resources combatting organized-crime groups and their immigration authorities are entirely overwhelmed.
As of now, the Trump administration has not specifically said what Mexico can do to reverse the tariffs.
See what others are saying: (The Washington Post) (Vox) (Fox News)
Senate Democrats and Republicans Reach Agreement With White House on $2 Trillion Stimulus Package
- After a long day of talks, Senate Democrats and Republicans reached an agreement with the White House on a stimulus package that would now cost the government $2 trillion.
- On Monday, Democrats shot down a stimulus package designed by Republicans and the White House.
- The revised package would include an increase in unemployment pay as well as an extension to unemployment insurance.
- It would also provide $500 billion to companies but would bar President Donald Trump, White House officials, and Congress from taking out loans for their businesses.
Senate Leaders and the White House Reach a Deal
After long talks and worries that lawmakers would go home empty-handed Tuesday, Senate Democrats finally reached a historic $2 trillion stimulus package with Senate Republicans and the Trump Administration around 1:30 a.m. Wednesday.
The agreement, which comes after Senate Democrats blocked a different version of the bill on Monday, includes several noticeable differences.
While Republicans had sought to extend unemployment insurance for up to three months, Democrats convinced them to extend that program for up to four months. Additionally, the bill would reportedly expand eligibility to cover more people, including gig economy workers.
People eligible for benefits will also see an additional $600 each week from the federal government, on top of their state benefits. On average, people receive $385 in state benefits each week while on unemployment.
The bill also includes $150 billion to hospitals and other health-care providers for equipment and supplies. According to Senate Minority Leader Chuck Schumer, the bill will also increase Medicare payments to all hospitals and providers.
As for direct checks, that breakdown remains unchanged. Adults making under $75,000 would receive two $1,200 checks and two $500 checks for each child. The first of those payments would go out on April 6.
People making above $75,000 would see a dip in that assistance, with payments phasing out altogether for people making more than $99,000 a year.
Trump and Congress Can’t Benefit From Business Loans
The bill also provides loan options for both small and large businesses.
Small businesses would receive more than $350 in aid. Notably, those loans would be federally guaranteed as long as a small business pledges not to lay off workers. If an employer continues to pay workers for the duration of the crisis, those loans would then be forgiven.
Big businesses would still receive about $500 billion to be used as back loans and assistance, a provision that originally led Democrats to vote down the previous version of the bill on Monday.
However, this bill also contains a few key limitations.
The most buzzworthy is that Democrats won language barring any business owned by President Trump from applying for those loans. That includes both Trump hotels and Mar-a-lago. Democrats sought such a measure because of their concern that Trump might try to use this bill to help his businesses, especially since many of them are connected to the travel industry.
Because they barred Trump, the bill also went a step further by also barring White House officials as well as any member of Congress.
Another limitation is that if a company does take out a loan, it will then be subject to a ban on stock buybacks through the term of the loan and for one year after.
Republicans also agreed to allow for an oversight board and to create a Treasury Department special inspector general for pandemic recovery. That is largely an attempt by the Democrats to ensure companies limit executive bonuses as well as take steps to protect workers.
Will the Bill Help the Economy and Will It Pass?
As far as if this bill actually will help the economy, that’s still unclear. With an economy that is slowing down every day and with stocks plunging over the last month, there is worry that it may not do enough; however, with more of the details of this package, stocks did see an uptick Tuesday morning.
Still, Congress is trying to move this bill into law as soon as possible. Reportedly, they’re rushing it through without public hearings or a formal review of the full bill.
If it passes through the Senate as expected, then it moves to the House of Representatives. Here, things could get a little trickier.
“This bipartisan legislation takes us a long way down the road in meeting the needs of the American people,” House Speaker Nancy Pelosi said on Wednesday. “House Democrats will now review the final provisions and legislative text of the agreement to determine a course of action.”
While Pelosi did say that the bill meets some of Democrats’ demands, she didn’t say how the House would vote. On Tuesday, as the agreement was being discussed among Senators and the White House, Pelosi said on CNBC that she hoped the House would pass it with unanimous consent.
While lawmakers are under extreme pressure to get a bill like this passed, unanimous consent may be a tall order for a $2 trillion bill that covers every aspect of the U.S. economy, especially because while the details of the bill have been released, the full document is still under wraps.
Because of that, it’s very possible that some lawmakers might hold off on passing the bill until a formal vote is held, and there have already been some concerns from both sides of the aisle.
If unanimous consent isn’t possible, some version—possibly a very similar version—of this bill will likely get passed; however, taking a formal vote could extend this process by several days. This is because representatives will likely be encouraged to wait an extended amount of time between their trips to the floor to vote.
From there, a couple things could happen. The House could pass a slightly different version. The House and the Senate would then need to hash out those details.
Or, the House could pass the legislation as is and go directly to Trump, who Mnuchin said would “absolutely, absolutely, absolutely” sign the bill.
See what others are saying: (The Washington Post) (The Los Angeles Times) (CNN)
Trump Wants to Reopen the Economy by Easter, Experts Say It’s a Bad Idea
- President Trump indicated that he would like to reopen the economy by April 12, despite objections from public health experts who say doing so would make the coronavirus pandemic worse.
- Speaking at a press conference, the president said that keeping the economy closed will create “far bigger problems,” and claimed that more people will die from job losses than the coronavirus.
- Meanwhile, cases continue to grow at a rapid pace in the U.S., which reported more than 100 deaths in a single day for the first time Monday.
Trump’s Economic Priorities
President Donald Trump said Tuesday that he wants to ease coronavirus restrictions and reopen the economy by April 12, despite objections from public health experts.
“I would love to have the country opened up and raring to go by Easter,” Trump said during an interview with Fox News.
The president had previously indicated that he wanted to pull Americans out of recommended isolation and put them back to work sooner rather than later during a press conference the day before.
“America will again, and soon, be open for business — very soon — a lot sooner than three or four months that somebody was suggesting,” he said.
“We cannot let the cure be worse than the problem itself. We’re not going to let the cure be worse than the problem,” Trump continued. “We have to open our country, because that causes problems that, in my opinion, could be far bigger problems.”
Trump said that he would wait until the 15-day period of recommended closures and self-isolation expires on March 30, and then reassess whether or not restrictions should be lifted and people should be sent back to work.
But when asked if any of the doctors on his team told him reopening the economy is the right move at this juncture, the president seemed to indicate that the medical experts should be taken with a grain of salt.
“Don’t forget, the doctors — if it were up to the doctors, they may say, ‘Let’s keep it shut down. Let’s shut down the entire world,’” he said.
When pushed on the question, Trump reiterated that keeping things shut down could create worse problems for the U.S. because of the size of the country’s economy and workforce.
“You have 160 — almost 160 million jobs in this country now — the most ever, by far,” he said. “So we can’t turn that off and think it’s going to be wonderful. There’ll be tremendous repercussions. There will be a tremendous death from that. Death. You know, you’re talking about death. Probably more death from that than anything that we’re talking about with respect to the virus.”
Cases in America Grow
While the president may believe that job losses will cause more deaths than the coronavirus pandemic, health experts say otherwise.
The vast majority of doctors and other medical experts say sending people back to work is the opposite of what the U.S. should be doing.
Despite what Trump may be telling the public, there is broad consensus that if the economy is reopened and people are forced to stop practicing social distancing, the coronavirus will continue to spread and there will be more deaths.
Trump’s remarks are especially concerning right now, as cases in the U.S. continue to grow rapidly. On Tuesday morning, the U.S. reported a total of 46,548 confirmed cases and 592 deaths— a significant jump in the death toll from just 24 hours prior.
In fact, on Monday, the U.S. reported more than 100 deaths in one day, marking the highest number of deaths reported in a single day in the country since the coronavirus pandemic started.
On Tuesday, the World Health Organization said that the U.S. has the potential to become the next epicenter of the disease due to the “very large acceleration” in cases in the states.
But most health officials knew that the situation would get worse before it got better, including those on Trump’s team and in his administration. A majority of experts believe that the U.S. has not hit its peak yet.
The countries that are scaling back their restrictions are doing so because they have reported consistent decreases in numbers— but the U.S. is reporting consistent increases. As a result, the U.S. needs to be ramping up restrictions, not scaling them back.
And when it comes to the economy, many economists believe that pushing to reopen at the risk of spreading the virus more will actually be worse. The move, they argue, could overwhelm the already overburdened health care system, create uncertainty for customers, and do more long-term damage.
“If you don’t flatten the curve and minimize those who are getting infected, the amount of sickness will cripple business,” said John Auerbach, the president of the nonpartisan group the Trust for America’s Health.
Even some of Trump’s biggest allies like Sen. Lindsey Graham (R-SC) agree.
“Try running an economy with major hospitals overflowing, doctors and nurses forced to stop treating some because they can’t help all,” Graham tweeted Monday. “There is no functioning economy unless we control the virus.”
See what others are saying: (NBC News) (Axios) (The Washington Post)
Defense Production Act Will Be Used For First Time in Coronavirus Pandemic to Secure Thousands of Test Kits
- FEMA Administrator Peter Gaynor said Tuesday that the Defense Production Act will be used today to secure 60,000 coronavirus testing kits.
- This comes after days of backlash against President Trump who has been hesitant to use the act, which would compel private companies to manufacture highly-needed medical equipment.
- Still, cases of the virus are rapidly increasing, especially in New York, where Gov. Andrew Cuomo says the lack of ventilators and other supplies will soon lead to deaths that could have otherwise been prevented.
The DPA and Trump’s Hesitation to Use It
Federal Emergency Management Agency Administrator Peter Gaynor said Tuesday that the Trump administration will formally implement the Defense Production Act today to secure thousands of desperately needed coronavirus testing kids.
Last week, President Donald Trump invoked the DPA, a Korean-War era provision that requires and provides incentives for private companies to prioritize federal government orders for products tied to national defense. So essentially, under this act, the government could order private manufactures to fulfill federal orders for critical medical equipment including ventilators, masks, and other supplies.
But since signing the DPA, Trump has resisted actually using it, despite calls from politicians and medical associations for him to do so. The president has said he will only use the act in a “worst case scenario” and said that he’s concerned about nationalizing American businesses.
“We’re a country not based on nationalizing our business,” President Trump said at a press briefing on Sunday. “The concept of nationalizing our businesses is not a good concept.”
He has also repeatedly said that invoking the act wasn’t needed because so many private companies have already been volunteering to manufacture supplies, though he did say Sunday that “we may have to use it someplace along the chain.”
On top of that, the president has insisted that state leaders should bear more responsibility for obtaining the live-saving equipment themselves.
Calls For and Against DPA Use
Cases of COVID-19 have continued to rise, leaving hospitals across the nation in distress.
While several companies have actually been voluntarily redirecting their focus towards manufacturing or donating supplies, some have expressed concerns about doing so without clear guidance from the federal government that outlines what equipment is needed and where.
Even with some companies like Tesla, Facebook, and Apple, stepping in to provide supplies, the need is still incredibly high and local officials have been pleading with the public for any and all help.
In some cases, they’ve even had to pay hiked-up prices for personal protection equipment or had to compete against other states for supplies.
But some of Trump’s advisors and business groups like the U.S. Chamber of Commerce have raised concerns about using the act. They argue that mandating production could hurt some companies, complicate supply chains of key products, and further hurt the economy.
Others warned that the law isn’t a quick fix because it could take weeks or even months before facilities could reconfigure themselves to make these highly-needed goods.
FEMA Admin Says DPA Will Be Used
Still, Gaynor told CNN Monday, “We’re actually going to use the DPA for the first time today. There are some test kits we need to get our hands on.”
More specifically, he said triggering the act would help secure about 60,000 test kits. For reference, 1 kit alone serves roughly 300-400 patients. If what Gaynor told CNN is true, this would mark the first time the act has been used during the coronavirus pandemic.
The FEMA Administrator also said the administration would insert “DPA language” into the mass contracts for the federal government’s order of 500 million personal protective masks.
“So we’re going to use it. We’re going to use it when we need it. And we’re going to use it today,” Gaynor reiterated. “We want to be thoughtful and meaningful on how we do it again for the best result,” he added.
However, Gaynor later went on Fox & Friends to say that the law would be used narrowly as “leverage,” and still asked for local officials to bear the brunt of the burden.
“We ask every governor — if you can find it, buy it. We are ready to use the Defense Production Act,” he said. “If we need as it leverage, we have it as leverage now.”
NY Needs Help Now
But securing more tests still doesn’t address those who are in desperate need of other life-saving equipment. New York, for instance, has been very public about their shortages.
Cases around the state are already well over 25,000 and the spread doesn’t appear to be slowing. In fact, Governor Andrew Cuomo said during a Tuesday news conference that the rate of infections in the state is doubling about every three days.
He said the state has “exhausted every option” to combat the spread of the virus and criticized FEMA, questioning why the DPA isn’t being used to produce ventilators.
“FEMA says, ‘we’re sending 400 ventilators.’ Really? What am I going to do with 400 ventilators when I need 30,000?” Cuomo said. “You pick the 26,000 people who are going to die because you only sent 400 ventilators.”
Shortly afterward, Vice President Mike Pence admitted during a Fox News town hall that New York is “truly the epicenter of the coronavirus now in our country.”
He added, “We’re in the process of literally sending the entire national stockpile out.”
“Earlier today, FEMA from the national stockpile shipped 2,000 ventilators to the state of New York, and tomorrow there will be another 2,000 ventilators shipped from the national stockpile. We have a ways to go yet.”