Republicans warn Trump against Mexico trade tariffs

WASHINGTON,

President Donald Trump faced fierce opposition Tuesday from his own Republican camp over his threat of tariffs to force Mexico to stem illegal immigration, with top allies warning Congress may not back him in his latest trade standoff.

As Mexican officials shuttled through Washington for last-ditch talks to avoid punitive tariffs on hundreds of billions of dollars in goods, Trump doubled down with his threats -- and said Republicans would be "foolish" to try and stop him.

Trump has vowed that five-percent tariffs on all imports from its southern neighbour would begin June 10, and reach 25 percent in the fall unless Mexico dramatically reduces the flow of undocumented migrants, mainly from Central America, to the US border.

Such levies would be "catastrophic,' a leading Mexican cross-border business group warned.

BLOCK VOTE

With tensions running high, Senate Republicans made clear they were considering a brazen legislative move to block the tariffs, and delivered an earful to White House officials explaining Trump's position at a closed-door Senate lunch.

"There is not much support in my conference for tariffs, that's for sure," said Senate Majority Leader Mitch McConnell after the meeting.

Asked if Trump's administration should be concerned about the threat of a disapproval vote to block the tariffs, Senator Ron Johnson told reporters: "If I were the White House I would be, sure. I made that point."

But McConnell declined to say outright whether his party would draft a measure to block Trump's duties from taking effect, in what would be the most dramatic act of Republican defiance since Trump took office in 2017.

"Apparently these (US-Mexico) talks are going well and I think our hope is that the tariffs will be avoided and we'll not have to answer any hypothetical," McConnell said.

Trump re-emphasised his threats during a state visit to Britain, bluntly saying it was "more likely" than not that the tariffs would go into effect next week.

"Mexico should step up and stop this onslaught, this invasion into our country," Trump said at a joint press conference with outgoing British Prime Minister Theresa May.

RHETORIC

Mexico's President Andres Manuel Lopez Obrador -- who has sought to avoid a confrontation with a longstanding ally -- shrugged off Trump's combative rhetoric and said he was prepared to meet with his counterpart to defuse the crisis.

"It's likely we will reach an agreement, and we are going to continue insisting that talks are the way to go," said the leftist leader, who took office in December.

Meanwhile, Mexico's National Council of Export Manufacturing and Assembly Industries (IMEX) warned the tariffs would have severe effects if they are put in place.

"Five percent would be critical. If it goes to 10 percent, it would be catastrophic. And from there on up, we'd be in crisis," said Pedro Chavira, the head of IMEX in the border city of Ciudad Juarez, capital of Mexico's booming export industry.

Speaking in Washington ahead of talks between Mexican officials and US trade representative Robert Lighthizer, Mexican Foreign Minister Marcelo Ebrard said he predicted an "80 percent" chance of success in negotiating a way out.

IMMIGRATION

Ebrard came to Washington armed with data, arguing steps already taken by Mexico would prevent an additional 250,000 migrants from reaching the US border by the end of 2019.

He said these steps ranged from letting US asylum seekers remain in Mexico while their applications are reviewed, to offering them work permits in southern Mexican states.

A US administration official meanwhile confirmed that Vice President Mike Pence and Secretary of State Mike Pompeo would hold further talks with Ebrard Wednesday at the White House.

Trump's shock tariff announcement pummelled the Mexican currency and sent markets in both countries tumbling over fears of a sharp slowdown in trade and high prices for imported goods on both sides of the border.

But US markets closed higher Tuesday, buoyed in part by Republicans signalling significant opposition to Trump's plan -- which they warn could scuttle the massive free trade agreement being finalized between Mexico, the United States and Canada.

The new deal, called USMCA and set to replace the longstanding NAFTA, is in the process of ratification.

'IT'S FOOLISH'

Trump brushed aside the clash, saying he did not believe Republicans would follow through with blocking his tariffs.

"If they do, it's foolish," he said. "I've had tremendous Republican support."

But several of his allies insisted Trump must reverse course.

Senator Ted Cruz, a conservative Trump ally and fierce advocate for stronger action to reduce illegal immigration at the southern US border, said lawmakers expressed "deep concern and resistance to imposing tariffs on trade with Mexico because it will hurt American jobs."

In unusually forceful language against a Trump initiative, Cruz said he expressed his concerns "very directly" with the White House, saying tit-for-tat tariffs could cripple the Texas economy with the equivalent of $30 billion in taxes.