It’s been a marriage made in business heaven so far, but now the U.S. Chamber of Commerce is weighing a lawsuit against the White House over President Trump’s latest round of tariffs.

The powerful business lobbying group confirmed today that “we are exploring all options, including legal action” after Trump announced tariffs on Mexican imports.

The tariffs would begin at 5% and increase by 5 percentage points each month before reaching 25% on Oct. 1.

Concerned investors say tariffs can drain profits.

Consumers fear tariffs because they could lead to increased prices, such as on cars imported from Mexico.

The U.S. imported about $371.9 billion in goods and services from Mexico in 2018, according to the Office of the U.S. Trade Representative.

Trump said he would pursue the tariffs until Mexico stops the flow of immigrants without legal documentation into the United States.

 

 

The surprise announcement yesterday sent U.S. stock markets tumbling today.

The tariff plan also raised fears about whether the U.S., Mexico and Canada can ratify the United States-Mexico-Canada Agreement.

Trump sees the replacement of the North American Free Trade Agreement as a top political and economic priority ahead of his 2020 reelection bid.

The duties could damage key U.S. industries such as auto manufacturing, and crucial 2020 electoral states such as Arizona, Michigan and Texas could feel particularly sharp pain from the tariffs.

The move by the U.S. Chamber reflects the pro-business interest group’s widening divide with the president.

The Chamber has staked out ground in opposition to Trump on immigration and trade.

The Republican senators from Iowa — an electoral swing state reliant on agricultural exports to Mexico and Canada — warned of dire consequences from the tariffs.

Senate Finance Committee Chairman Chuck Grassley called Trump’s plan a “misuse of presidential tariff authority” that “would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump’s.”

Sen. Joni Ernst, who is up for reelection next year, also said that “if the president goes through with this, I’m afraid progress to get this trade agreement across the finish line will be stifled.”

Sen. Martha McSally, an Arizona Republican who will run to keep her seat in one of next year’s most important Senate races, said in a statement that she does not “support these types of tariffs, which will harm our economy and be passed onto Arizona small businesses and families.”

An aide to Sen. John Cornyn, a Texas Republican hoping to hold his seat in 2020, said the senator “opposes this across-the-board tariff which will disproportionately hurt Texas.” Both lawmakers’ offices said they back Trump’s effort to secure the border despite their opposition to duties.

Sen. Gary Peters, a Michigan Democrat up for reelection next year, said in a statement he is “concerned about the impact of the president’s proposal on Michigan workers and our auto industry.”

He added that “it’s unclear how this will strengthen security” at the U.S.-Mexico border.

 

Attribution:CNBC
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