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Trump’s Mexico tariffs would affect U.S. consumers. Would they also slow immigration?

The U.S. and Mexico appear to be at a standoff over immigration and trade, with President Trump threatening to impose tariffs on Mexican imports if Mexico doesn’t reduce migration into the U.S. Nick Schifrin talks to Arturo Sarukhan, former Mexican ambassador to the U.S., and the Center for Automotive Research’s Kristin Dziczek about what Mexico can do and the economic impact of the tariffs.

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  • Judy Woodruff:

    Here in Washington today, the U.S. and Mexico are in a standoff over immigration and trade.

    President Trump is threatening to impose tariffs if Mexico doesn't reduce the number of migrants and asylum seekers crossing the border into the U.S. Those tariffs could wreak havoc on both economies.

    And, as Nick Schifrin explains, the president's threat could have a major effect on the U.S. relationship with its largest trading partner.

  • Nick Schifrin:

    Judy, the administration says there is a crisis at the southern border. Mexico admits that, last month, it detained more than 23,000 trying to cross the border, more than double the 2018 number.

    The U.S. says it arrested more than 144,000 people trying to cross illegally, the highest number in 13 years. The White House is blaming Mexico, saying it should better police the border. And the two sides are talking here, ahead of the president's Monday deadline to impose tariffs.

    We will talk about the possible impact of those tariffs on the U.S. shortly.

    But, first, to discuss immigration and Mexico's perspective, I'm joined by Mexico's former Ambassador to the U.S. Arturo Sarukhan.

    Ambassador, thank you very much…

  • Arturo Sarukhan:

    Thank you, Nick.

  • Nick Schifrin:

    … for being here.

    Fundamental question that the White House is asking: Can Mexico stop illegal immigration into the United States?

  • Arturo Sarukhan:

    No.

    If the idea is we go from what's going on now to zero, that's not going to happen. You can't enforce your way out of migration crises. You have to understand some of the structural dynamics that have been creating this over the last two, three years.

    What Mexico can certainly do is enhance its operation control of its border with Guatemala, put more money and resources and manpower into its immigration agency and into its refugee agency, so that we can better control those flows, make sure that we're preventing those caravans from reaching the border with the United States, provide more visas for asylum and work visas for those Central Americans who do decide to stay in Mexico, instead of trying to make their trek to the northern part of the country.

    But you're not going to stop this. You know, this idea that, you know, in six days, if you don't stop this, I'm going to slap — I'm going to slap 5 percent tariffs is a ludicrous proposition, because, also, what has never been clear is, what does improvement mean? What are those goalposts?

    Are you going to continue to move those goalposts? And what's even more troubling is the president's decision to contaminate and take the trade agenda hostage to force concessions from Mexico on immigration policy.

  • Nick Schifrin:

    So, those things that you just listed, what Mexico should be doing, is Mexico doing that right now?

  • Arturo Sarukhan:

    I think it's doing some of that.

    Mexico has deported 75,000 Central American migrants just in the first six months of this year. It has — it is hosting about 8,000 Central American migrants that have been sent back across the U.S.-Mexico border to the Mexican side of the border while they await their asylum or immigration hearings in the U.S.

    And that is costing municipalities and states a hefty sum, and it's creating some inevitable social tensions with people in Mexico who are saying, you know, why are we doing the dirty work of the United States?

    I may agree or disagree with that characterization, but people are starting to say this.

  • Nick Schifrin:

    So, there are certainly some people who are starting to say this.

    But, as you know, Lopez Obrador, the president of Mexico, is very popular, somewhere between 65 and 80 percent popularity. He holds a press conference every morning. People do listen to him. Couldn't he make a deal with the United States and not take a political hit from his supporters?

  • Arturo Sarukhan:

    I think it's very hard to do that if you're confronted with diplomacy as ultimatums, and the highway — "my way or the highway" approach to foreign policy that President Trump has followed with Mexico.

    Remember, Mexico has been a political electoral pinata for this president since the 2016 election. It is going to continue to be an electoral pinata on the road to his — to him seeking reelection in 2020.

    So the president, yes, he has sufficient wiggle room in terms of his popularity, but a poll that came out this weekend, 24 hours after the president — President Trump announced his decision, showed that favorable perception of the United States has now collapsed to 17 percent.

    So there is a certain limit to what the president can do, particularly if Mexicans start feeling that he's bending the knee to the president's demands.

  • Nick Schifrin:

    To President Trump's demands.

  • Arturo Sarukhan:

    Yes.

  • Nick Schifrin:

    Now, this isn't, of course, only about Mexico. It's also about the United States and about U.S. consumers.

    And the industry that is hardest hit or would be hardest hit by these tariffs would be vehicles, of course. More than a quarter of all vehicles in the U.S. are imported from Mexico. More than a third of all vehicle parts come from Mexico.

    And to discuss that, I'm joined my Kristin Dziczek, a vice president at the Center for Automotive Research.

    Thank you very much for coming on the "NewsHour."

    Describe for us what the impact of these tariffs would be on the auto industry.

  • Kristin Dziczek:

    Well, thank you for having me.

    And, you know, the impact would be huge, whether you're in the market for a new vehicle or you just want to hold on to the vehicle you have and repair and maintain it. We are dependent on parts that come from Mexico and, by the way, also China.

    And if we start to see tariffs on Mexican parts imports, the cost of a vehicle, a new vehicle in the U.S. is going to go up somewhere between $1,100 and $5,400 a vehicle. We will see a couple of models just disappear from the market. The smaller sedans made in Mexico, just they won't sell them here anymore.

    And, you know, that limits consumer choice. It will hit GDP, up to $34 billion hit to GDP. And we would see almost 400,000 American jobs disappear.

  • Nick Schifrin:

    So, as you know, that is not the narrative given out by the White House. The White House says these tariffs would help.

    And let's take a listen to President Trump today describing how these tariffs would help the U.S. economy.

  • Donald Trump:

    A lot of people, senators included, they have no idea what they're talking about when it comes to tariffs. They have no — absolutely no idea.

    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.

  • Nick Schifrin:

    You're in a position to do very well with tariffs.

    Is that true?

  • Kristin Dziczek:

    No.

    You know, the auto industry is a industry that is very integrated in the U.S., Canada, and Mexico. The smaller suppliers are really going to get hit hard. Their margins are thin, and they don't have enough space in their profitability to eat these tariffs. They're going to have to try to pass them along to their consumers, and their consumers are big automakers that are not going to want to take on this price increase.

    So small suppliers and, you know, people in the United States who buy small cars and maintain their cars, they are the ones who are going to pay for this.

  • Nick Schifrin:

    It wasn't always the case that the supply chain was so integrated. The White House says some of these jobs could return to the U.S. Is that possible?

  • Kristin Dziczek:

    Well, some may.

    And the U.S. auto industry is running well above 80 percent, 85 percent utilization of our existing footprint. The thing is, these are tariffs that were put in place with less than two weeks' notice. And this is an industry that — when we build a new assembly plant, that's $1.6 billion. That doesn't turn on a dime. Those take years to put the investment in place and to build.

    So I think, mostly, automakers and suppliers are going to sit on their hands, try to make it work, and figure out how to, you know, patch this together in the short term. But I don't see big movements of capital and jobs to the U.S. for a tariff that is, you know, for potentially just a negotiating tactic for a different — for a different problem.

  • Nick Schifrin:

    Ambassador Sarukhan, I want to end with you.

    There's an economic threat to the U.S., as we just heard. There's also an economic threat to Mexico. Ultimately, quickly, in the time we have left, does that mean that Mexican officials want to make a deal?

  • Arturo Sarukhan:

    Well, I think Mexico has been behaving like the adult in the relationship. I think Mexico wants to find ways to de-escalate the tension that President Trump has been stoking in the U.S.-Mexico relation.

    But the challenge and the danger is that, by doing this, especially if tariffs get slapped on, on June 10, is that the wheels of this strategic relationship that has been building between Mexico and the United States over the past 20 years are going to start falling off.

    And the question policy-makers in Washington may be facing in a few years down the road is, who lost Mexico?

  • Nick Schifrin:

    Arturo Sarukhan, former ambassador, former Mexican ambassador to the U.S., Kristin Dziczek, Center for Automotive Research, thank very much to you both.

  • Arturo Sarukhan:

    Thank you.

  • Kristin Dziczek:

    Thank you.

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