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‘Tariffs are the answer’: Trump appears emboldened after economic brinkmanship with Mexico

Asked on June 10 why Mexico was denying an immigration deal with the U.S., President Trump said, “I don’t think they’ll be denying it very long. It's all done." (Video: The Washington Post)

A sense of relief among Republicans and business leaders after President Trump postponed his tariff threats against Mexico gave way Monday to growing unease over whether he had internalized the risks of his economic warfare — or was emboldened by the showdown.

Trump signaled the latter as he called in to CNBC to declare victory in his negotiations with the Mexican government, trumpeting an immigration deal and boasting that his willingness to wield the specter of tariffs had made the difference.

“As soon as I put tariffs on the table, it was done. It took two days,” Trump told the financial news network. “ . . . If we didn’t have tariffs, we wouldn’t have made a deal with Mexico.”

It remains to be seen whether Trump’s deal with Mexico will achieve his goal of stemming a surge of unauthorized immigration. But Trump’s takeaway from his gambit to tie tariff threats to a non-trade issue — a strategy that provoked an outcry from big business and a near-revolt among GOP lawmakers — was that the naysayers had been proved wrong.

President Trump on June 10 said he would not be “insulted” if Chinese President Xi Jingping did not meet with him at the upcoming G-20 summit in Japan. (Video: The Washington Post)

“Not so brilliant” Trump crowed on CNBC when asked about criticism from Myron Brilliant, a vice president at the U.S. Chamber of Commerce, who had warned of the “weaponization of tariffs.”

Confident that he had forced Mexico to take steps on border security that it had resisted for decades, Trump pivoted to his trade war with China and, in the interview, appeared to threaten more tariffs on the world’s second-largest economy if President Xi Jinping refuses to meet with him at the Group of 20 summit in Osaka, Japan, in late June.

He also resurfaced his past complaints that France charges unreasonable tariffs on American wine imports and hinted at retaliatory measures on French products.

“People haven’t used tariffs,” Trump said, “but tariffs are a beautiful thing when you’re the piggy bank, when you have all the money.”

The president’s gleeful posture struck foreign policy analysts and economists as a clear sign that he intends to intensify his strategy, ramping up the threat of levies against not just China but potentially other countries. Trump already has threatened new auto tariffs on allies, including Japan and Germany, in recent months.

“Where we seem to be right now are that tariffs are a big hammer and every foreign policy problem looks like a nail,” said Richard Fontaine, chief executive of the Center for a New American Security, who has advised several Republican presidential candidates. “Tariffs are the answer to a foreign leader who might not meet with you. They are the answer to the immigration problem. They are the answer to the trade problem. All the way across the board.”

Trump faced a wall of opposition from Senate Republicans and business leaders over his threats to impose tariffs of 5 percent on all goods from Mexico — and then raise them to 25 percent over several months — if that nation did not agree to significant border security measures aimed at blocking the record number of Central American families traveling through Mexico in an effort to seek asylum in the United States.

Congressional Republicans last week privately began discussing a potential vote to block the tariffs, which would have amounted to an extraordinary rebuke of Trump and set up a potential test of constitutional powers. The U.S. Chamber, meanwhile, on Friday issued a joint statement from 140 organizations warning that tariffs on Mexico “would harm U.S. consumers, workers, farmers and businesses of all sizes across all sectors.”

Some of Trump’s own advisers, including U.S. Trade Representative Robert E. Lighthizer and senior adviser Jared Kushner, the president’s son-in-law, also lobbied against the levies, arguing that a trade war with one of the United States’ largest trading partners would harm both nations.

The pushback from his own party stood in contrast to the response to Trump’s trade war with China, for which the president has not come under similar criticism despite several rounds of tariffs from both sides. In that case, Trump has won praise from Republicans, and some Democrats, for attempting to force Beijing to change predatory economic practices, including stealing intellectual property from U.S. businesses.

Trump appeared willing to blow right through all the warnings. During a visit to Europe last week, he said GOP leaders would be “foolish” to try to stop him if Mexico refused to make a deal, and he suggested that members of his party were ill-informed.

“A lot of people, senators included, they have no idea what they’re talking about when it comes to tariffs,” Trump told reporters in Ireland last week. “When you have the money, when you have the product, when you have the thing that everybody wants, you’re in a position to do very well with tariffs, and that’s where we are.”

Arriving back at the White House on Friday evening, Trump boasted on Twitter that the stock market had gone up more than 260 points despite a sluggish May jobs report, which economists linked to his tariff wars with China and Mexico. Hours later, the White House announced the immigration deal with Mexico, which agreed to dispatch thousands of national guard troops to its border with Guatemala and to expand a program that forces Central American migrants to wait in Mexico as their asylum cases are adjudicated in U.S. immigration courts.

Some analysts expressed cautious optimism that Trump had recognized the limits of his economic brinkmanship. Rufus Yerxa, president of the National Foreign Trade Council, said the pushback from congressional Republicans and the corporate community was so strong that Trump may not be tempted to reprise his tariff threats as freely.

“This was the last straw for a lot of people,” Yerxa said, noting that some industry associations were considering taking legal action to block the president’s tariff plans.

If Trump moves forward with tariffs on imported automobiles and auto parts, as he has suggested, he will probably encounter similarly intense opposition, Yerxa said. Even on China, business groups are unlikely to give him a blank check, Yerxa added.

Kevin G. Nealer, an economic analyst at the Scowcroft Group, agreed that Trump might have closed on a deal with Mexico in part because it offered a way to avoid potential blowback from his own party.

However, Nealer emphasized that as Trump ramps up his reelection messaging, he might feel compelled to wield more tariff threats in a bid to look tough to his conservative base in service of his “America First” agenda.

On Monday, Trump said that if Mexico does not make good on its efforts to reduce the number of migrants who reach the United States, he will rekindle the tariff threats.

“For Trump, the Mexico experience has made him even more risk indifferent on trade,” Nealer said. The relative strength of the American economy has convinced Trump that the naysayers who warned of his protectionist impulses “don’t know what we were talking about.”

David J. Lynch contributed to this report.