Business groups and establishment media outlets are urging President Donald Trump to split his trade and migration policies, even though business includes cheap-labor immigration in their own trade policies.
“I don’t think mixing immigration and trade tariffs is a good approach to things,” a former ambassador to Mexico, Earl Wayne, told the Hill on Monday. “U.S. companies are very worried of the costs it’s going to impose,” said the ambassador, who was nominated by former President Barack Obama. Wayne served as an ambassador in Mexico when the government quietly encouraged the cross-border flow of Central American migrants into the United States.
Pro-migration Mexican officials are echoing the claim by business that trade and migration are completely unconnected issues. The immigration issue is “an enormous distraction,” says Jesus Seade, Mexico’s deputy foreign minister for the United States and Canada. “We came up with [a] very good [trade] agreement, one that Trump himself has celebrated. What we need to do is what we were doing last week,” he told reporters on Friday.
Mexico’s government is making the same pitch. “We are not willing to mix them,” deputy foreign minister Marcelo Ebrard said June 3.
“It is so deeply ironic that the globalists are now trying to separate the two when they put them together in the first place” during prior trade talks, said Jessica Vaughan, policy director at the Center for Immigration Studies. “Historically, the globalists wanted them connected because immigration is a form of trade [of labor] for them,” she said.
For example, the new U.S trade deal with Mexico includes a section preserving the TN visas, which allow a large number of white-collar workers to work in the U.S. for companies based in Canada and Mexico. That clause was inserted at the insistence of Mexico and U.S. companies.
Moreover, the flood of migrants from Central America added more than 400,000 workers to the economy in 2017 and 2018. If Trump shrinks the migration, he would pressure the companies to raise wages for Americans and also to hire sidelined, untrained, or low-quality American workers, or to buy the labor-saving machinery which makes Americans more productive and wealthy.
So business groups are trying to separate the two issues now that Trump is using the economics and tariffs in his campaign get Mexico’s cooperation against the inflow of cheap illegal labor into the United States.
“Intertwining difficult trade, tariff and immigration issues creates a Molotov cocktail of policy, and America’s manufacturing workers should not be forced to suffer because of the failure to fix our immigration system,” according to a statement from Jay Timmons, president of the National Association of Manufacturers.
“These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border,” claimed Neil Bradley, the chief policy officer at the U.S> Chamber of Commerce. “Instead,” he said, “Congress and the president need to work together to address the serious problems at the border.”
“We are all in for reforming our immigration system and helping solve the problems we have on the border,” said Adam Brandon, president of the FreedomWorks advocacy group. “A tariff on Mexico is a setback to those efforts. Not only will it harm Americans, but an economically weakened Mexico will result in more illegal immigration northward … We are already seeing a downturn in the stock market after President Trump’s threat.”
“There’s no dispute that the U.S. has an immigration and humanitarian problem, some might say a crisis, at the southern border,” admitted Mark Hamrick, the senior economist at Bankrate.com. “But wielding tariffs in an attempt to resolve an immigration problem is like fielding a baseball team for a football game … [it] is likely counter-productive.”
Public concerns about cheap -labor migration are being ignored as business’ priorities are amplified by the establishment media, including the Washington Post, the New York Times, Politico, and the Wall Street Journal.
The New York Times ignored employees and families as it spotlighted the concerns of medical-device makers, groceries and farmers, oil refineries, and the automakers, saying:
No industry better symbolizes the integrated North American economy than the automakers. And no industry stands to lose more if that integration breaks down.
General Motors has three Mexican plants that make some of its most important models, including the highly profitable Silverado and Sierra pickup trucks and the new Chevrolet Blazer sport-utility vehicle. G.M. and Fiat Chrysler rely on Mexico for about a quarter of their North American production, and Ford for 10 percent.
The NYT also quoted one university economist as a supposed stand-in for consumers:
“As a consumer, that was my first thought,” said Emily Blanchard, an economist at the Tuck School of Business at Dartmouth College. “Those are my avocados and strawberries. What are you doing?”
Agriculture associations and food companies said tariffs on Mexican imports would lead to higher costs. Food typically moves through a more-complex, time-sensitive supply chain than general merchandise and is sold at lower margins. That leaves less room for companies to cut costs without raising prices for shoppers.
Grocers and restaurants are already digesting the impact of a 17.5% duty on Mexican tomatoes implemented in early May, after a decades-old agreement between the countries wasn’t renewed.
Restaurants are watching the issue closely. “If the announced tariffs are enacted, they would negatively impact our costs and we are monitoring the situation and working with our suppliers to minimize the impact,” Laurie Schalow, a spokeswoman for Chipotle Mexican Grill Inc. said Friday.
Politico spotlighted the concerns of investors:
Scott Jennings, who worked under President George W. Bush and is close to the Trump White House, said Trump will get credit from his base, but conceded that he is “extraordinarily nervous” about the possible economic effect of the tariffs. Stocks took a hit Friday as jittery business leaders warned that the tactic was woefully misguided, damaging American consumers and likely resulting in retaliatory tariffs by Mexico.
But the White House is also pushing back. “Industry should be in communication with their counterparts in Mexico to encourage the Mexican government to work with the administration and stave off the dangerous crisis at our southern border as quickly as possible,” a White House official told CNBC.
Each year, roughly four million young Americans join the workforce after graduating from high school or university.
But the federal government then imports about 1.1 million legal immigrants and refreshes a resident population of roughly 1.5 million white-collar visa workers — including approximately one million H-1B workers — and approximately 500,000 blue-collar visa workers.
The government also prints out more than one million work permits for foreigners, tolerates about eight million illegal workers, and does not punish companies for employing the hundreds of thousands of illegal migrants who sneak across the border or overstay their legal visas each year.
This policy of inflating the labor supply boosts economic growth for investors because it ensures that employers do not have to compete for American workers by offering higher wages and better working conditions.
This policy of flooding the market with cheap, foreign, white-collar graduates and blue-collar labor also shifts enormous wealth from young employees towards older investors, even as it also widens wealth gaps, reduces high-tech investment, increases state and local tax burdens, and hurts children’s schools and college educations. It also pushes Americans away from high-tech careers and sidelines millions of marginalized Americans, including many who are now struggling with fentanyl addictions. The labor policy also moves business investment and wealth from the heartland to the coastal cities, explodes rents and housing costs, shrivels real estate values in the Midwest, and rewards investors for creating low-tech, labor-intensive workplaces.