White House and Mexican government officials met Wednesday (US time) to try and reach a deal to halt or delay President Donald Trump's plan to impose tariffs on roughly US$350 billion ($528.3b) in imports, a threat that poses major implications for both economies.
The two sides are due to continue their discussions on Thursday, with Trump confirming in a Twitter post that tariffs will go into effect next week unless he is satisfied Mexico has done enough to stem a surge of migrants.
"Immigration discussions at the White House with representatives of Mexico have ended for the day. Progress is being made, but not nearly enough!" Trump tweeted. "If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule."
With time running out before the first set of tariffs are set to go into effect, driving up the cost of everything from cars to vegetables, Vice President Mike Pence met for two hours with Mexican foreign minister Marcelo Ebrard at the White House.
White House officials described the meeting between Pence and Ebrard as productive and said Mexican officials suggested a number of helpful changes.
Ebrard said the two sides did not discuss tariffs at the meeting.
"The dialogue was focused on migration, and what Mexico is proposing to the United States," he told a press conference. "We're concerned about the Central American situation right now."
Ebrard characterised the meeting as cordial, and said both US and Mexican negotiators had a chance to lay out their positions. He said the US position did not differ from what officials have said publicly.
"We are optimistic," he said.
Trump has insisted that the tariffs are a necessary tool to force the Mexican government to stop migrants crossing into the United States. Mexican officials have said they will try and do more, but White House officials have not signaled whether the concessions Mexico plans will be sufficient.
Complicating matters, Trump is traveling in Europe and is being briefed on discussions by his aides thousands of miles away.
Trump's top advisers are also facing a revolt from Republican senators, who have said they will try to block the tariffsbecause they consider these import penalties to be a large tax increase on US companies and consumers.
Senate Majority Leader Mitch McConnell, R-Ky., has asked White House officials to postpone any decision until after Trump was able to personally hear lawmakers' concerns, two people familiar with the exchange said. Such a scenario could require the White House to delay the tariffs.
Problems at the southern border have grown rapidly in recent months. US Customs and Border Protection released new data on Wednesday that showed there has been a surge in the number of people trying to enter the United States across the Mexican border. In May, CBP apprehended 144,278 people - mostly families and children - trying to enter the US That's up from 51,862 during May of 2018.
Trump has said the US is being "invaded" and that drastic measures are needed to stop the flow of migrants. White House officials have demanded that Mexico allow people seeking asylum in the US to stay temporarily in Mexico, and have also called on the Mexican government to do more to deter caravans and seal off the border with Guatemala.
In a possible new shift, Guatemelan interior minister Enrique Degenhart told the Washington Post Wednesday officials were working with the US Department of Homeland Security to deal with the rising number of migrants.
The White House's precise demands have remained unclear. Trump has said Mexico must block all migrants from entering the US, while other White House officials have suggested they just want to see Mexico do more to deal with the crisis.
Trump last week shocked congressional and Mexican leaders by saying he would impose a 5 per cent import penalty on all goods imported from Mexico beginning June 10. Those fees are paid by US companies importing the products, and the costs are often passed along to consumers.
Trump has embraced the use of tariffs as a way to try and force other countries to do what he wants because these penalties can damage the economy of a foreign country and he doesn't need congressional approval to implement them.
The White House has imposed tariffs against US$250b in goods imported from China and started the process to impose tariffs against even more products.
But there appears to be little precedent for a president to issue blanket tariffs against another country in the manner Trump wants to with Mexico.
White House officials couldn't even explain to Senate Republicans Tuesday how they would legally set up the import penalty. That has led a number of lawmakers to say they would attempt to block Trump, worrying that he was conflating immigration and trade issues and that he could end up doing damage to the US economy.
In addition to cars, machinery, and crude oil, a wide range of other products are imported from Mexico each day. These include wires and cables, telephones, computer monitors, tractors, refrigerators and medical equipment.
Democrats have accused Trump of acting wildly and trying to use the migration issue as a way to distract from other problems.
"I don't even think it rises to the level of policy," House Speaker Nancy Pelosi, D-Calif., said. "I think it's notion-mongering, again. And it's really - well, let's say what it is. It's a distraction from the Mueller report, and it served its purpose. Right? Here we are, here we are."
Trump on Tuesday appeared set on imposing the tariffs, but there was signs of White House wavering on Wednesday. Peter Navarro, one of Trump's top trade advisers, said the tariff threat alone might have been sufficient to get Mexico to act.
"We believe that these tariffs may not have to go into effect precisely because we have the Mexicans' attention," Navarro said. "Let's stay calm and look at the chessboard here."
Trump, speaking in Ireland, was more careful, saying he wanted to see if there was a big development at the meeting.
"Mexico, you know, wants to make a deal," he said.
US companies import close to US$400b in goods from Mexico each year, including cars, fruits and vegetables, and machinery. Trump has said that he will start the tariffs at 5 per cent but ratchet them up each month until they hit 25 per cent.
The White House meeting came after Republican senators blasted the White House on Tuesday, vowing to try and block the Mexico tariffs through procedural votes. The lawmakers appeared confident they had enough votes to pass a veto-proof measure in short order.
White House officials were aware of the Republican backlash but had not signaled whether it would impact their strategy.
Trump has shown little willingness to back down, however. In a news conference Tuesday, Trump predicted the tariffs would go into effect and then negotiations would begin in earnest after that. He attacked Senate Minority Leader Charles Schumer, D-N.Y., for suggesting that the tariff threat was a bluff and that Trump wouldn't follow through.
"He gave Mexico bad advice, no bluff!" Trump wrote on Twitter.
Pelosi accused Trump of treating Mexico "as an enemy" and said it was the wrong approach to dealing with the border.
"I think that this is dangerous territory. This is not a way to treat a friend," she said at a news conference.
Rep. Earl Blumenauer, D-Ore., who chairs the House Ways and Means trade subcommittee, said in an interview Wednesday that House Democrats were reviewing their options for "containing the damage" from Trump's threatened tariffs. He said the tariffs are overwhelmingly opposed in the House and predicted a strong vote to block them.
Blumenauer attended a Tuesday meeting at the Capitol with Pelosi, Mexican Secretary of Foreign Affairs Marcelo Ebrard, and others. He said the Mexican contingent had prepared calmly for the critical meeting with Pence in hopes of staving off the tariffs.
"They've been dealing with this mercurial, unpredictable behavior for two-and-a-half years, and they are pros. They have a lot at stake," Blumenauer said. "They seem to appreciate what the president doesn't - how critical getting this balance right is for both countries."
Blumenauer noted that just weeks ago Trump relented and lifted tariffs on steel and aluminum imports from Canada and Mexico under congressional pressure.
"They've seen these things come and go," Blumenauer said. "We've seen in the past the administration can turn on a dime."
White House officials had been preparing for the tariffs to go into effect next week, confident that Trump wanted to push ahead even though there was a meeting Wednesday.
Navarro's comments scrambled their messaging, however, and several senior administration officials said it was unclear what would ultimately happen. They said they were waiting for Trump to make the final call.