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Sioux City Journal: Suspension of tariffs on Mexico is good news

Late last month, President Trump threatened to impose a 5 percent tariff on all goods imported to the U.S. from its biggest trading partner, Mexico, beginning June 10 and increase those tariffs by 5 percent each month to a permanent level of 25 percent in October unless Mexico satisfied him it is getting tougher on illegal immigration.

Because we joined what it appeared was almost-universal criticism of taking this step, we were pleased talks between the U.S. and Mexico prevented implementation of these tariffs.

On Friday night, President Trump said tariffs on Mexican goods were “indefinitely suspended” after negotiators reached a deal on immigration enforcement.

For all of the reasons detailed below, we hope this is something the Trump administration won’t revisit in the future.

Put aside for the moment the question of whether the tariffs would have been, as U.S. Sen. Charles Grassley, R-Iowa, said, a “misuse of presidential tariff authority” and the fact President Trump was telling Mexico it needed to manage the border better on its side when our own country’s leaders aren’t addressing illegal immigration through comprehensive immigration reform on our side, then consider the consequences of Mexico tariffs.

• American consumers would feel the pain.

“Last year, Americans imported more than $346 billion in goods from Mexico, with cars and auto parts, computer equipment, manufacturing inputs and agricultural products among the top products imported. ... The 5 percent tariff represents a tax increase of approximately $17 billion on U.S. consumers and businesses. Should the tariff rate escalate to 25 percent, the tax on Americans would reach $86 billion, according to a Chamber analysis of Commerce Department data,” Thomas J. Donahue, U.S. Chamber of Commerce chief executive officer, wrote in a piece for Fox Business.

• The overall U.S. economy would suffer.

The Perryman Group, an economic analysis firm based in Texas, said tariffs, if enacted and maintained, likely would cost hundreds of thousands of American jobs.

In a report issued last week, the National Association for Business Economics said protectionist trade policy is the primary concern driving a “surge” in fear of recession by the end of 2020 among economists.

“Increased trade protectionism is considered the primary downwide risk to growth by a majority of the respondents,” Gregory Daco, chief U.S. economist for Oxford Economics, said in a statement.

• Already feeling the negative impact of the Trump administration’s trade war with China, farm states like Iowa would get hurt even more.

The U.S. exported $19 billion in agriculture products to Mexico last year, making Mexico the second-largest buyer, after Canada, of those products, according to the U.S. Department of Agriculture. Mexico is the No. 1 market for U.S. corn, rice, dairy products, poultry, and eggs, and is a major buyer of American beef, pork, soybeans and wheat.

“Producers are extremely concerned about another potential trade retaliation from Mexico,” said National Pork Producers Council President David Herring, a pork producer from North Carolina.

• Tariffs would have cast a cloud of uncertainty over the revised NAFTA trade deal, known as the U.S.-Mexico-Canada Agreement.

“We need to secure the border and address our nation’s broken immigration system, but it cannot be done on the backs of Iowa farmers,” Iowa Gov. Kim Reynolds said in a statement. “Iowans are frustrated with Washington’s inability to reform our country’s immigration system and address the crisis at the border, but I am asking the president to rethink this approach. Mexico is Iowa’s top trading partner, and placing new tariffs could undo the progress made by the negotiated USMCA trade agreement. Congress must move forward with ratification of the USMCA.”

• By hurting the economy of Mexico through tariffs, the Trump administration would run the risk of making the illegal immigration problem worse.

“A weaker economy (with slower growth and potentially rising unemployment) will serve to increase the incentives for Mexicans to attempt entering the U.S. in search of work. Or put bluntly, the number of illegal immigrants coming to the U.S. via the open Mexican border will almost certainly increase,” Simon Constable, a writer, economics commentator, and a fellow at The Johns Hopkins Institute for Applied Economics, Global Health and the Study of Business Enterprise, wrote in a piece for Forbes.

Without question, suspension of tariffs on Mexico is good news.

— June 9

Quad-City Times: Legislating by neglect

In defending her veto of a bill expanding the state’s medical marijuana program, Iowa Gov. Kim Reynolds said last week that the measure was “too much of a jump for her.”

In the closing days of the session, Iowa lawmakers voted overwhelmingly to expand the state’s medical marijuana law, enhancing the allowable limit of THC, the psychoactive ingredient in marijuana, so that people could purchase up to 25 grams per 90 days. The amount was higher than what state’s Medical Cannabidiol Advisory Board recommended — and more than the 3% current cap currently in place.

Proponents of the bill say the cap limits the program’s effectiveness.

The governor didn’t agree with the bill that was offered, but she said she’s willing to work with the legislature on a compromise.

It’s too bad there wasn’t more clarity on this issue during the session. Some lawmakers confessed to being confused by what the state’s cannabis advisory board was recomnending. And the governor’s veto of a bill that was overwhelmingly approved by lawmakers in her own caucus suggests a clear disconnect.

This breakdown occurs as states all around us are liberalizing their own marijuana laws. We just saw the Illinois General Assembly pass a bill legalizing recreational marijuana. With Gov. J.B. Pritzker’s expected signature, that will make Illinois the 11th state to do so. Sales will begin in January.

The new law will allow the possession of up to 30 grams of marijuana, which is a little more than an ounce. The purchases have to be made at approved dispensaries. People from out of state can buy half that, though it’s important to note, possession still is illegal in Iowa.

We doubt this kind of legalization will come to Iowa anytime soon. The state is historically cautious — sometimes to a fault — though in this instance it is a reticence that is shared by the public. A Des Moines Register poll earlier this year found the state evenly split on the question of legalization.

The trend, however, seems to be moving toward legalization.

This editorial board reflects that division. The libertarian idea that this should be the choice of individuals is reflected, as is the uncertainty that comes from the knowledge that the science is unsettled on the medicinal benefits of marijuana. We have seen reports that cannabidiol, a part of cannabis plant that does not produce a high, has promise in dealing with opioid addiction. But there is debate about that, too.

What is clear, however, is that the current law is not sufficient. Nearly 80% of Iowans in that same Register poll, said the law needs to be expanded.

Last we checked, only about 100 people in Scott County had been approved for cards. Our sense is the need is greater.

We have heard the stories of people who have been helped — whose pain has been eased — by the use of marijuana. We have also heard the stories of those who continue to suffer and are asking for more help. Their experiences should be heard and valued, even as we evaluate the conflicting medical evidence.

Our fear is that with so many states approving recreational marijuana, Iowa’s program will soon become irrelevant.

With Illinois legalizing marijuana, there is no doubt that some of it will be brought back to Iowa. Adam Sullivan, a columnist for the Cedar Rapids Gazette and a critic of the restrictions in Iowa’s law, recently wrote that this development would be troubling for public health advocates. “Lacking a workable medical cannabis program, Iowa patients will be forced into medicating themselves with lightly regulated products, outside the purview of medical professionals,” he wrote.

That surely is not what Iowa legislators want. But it is the direct consequence of legislating by neglect. Iowa passed a medical marijuana law five years ago and expanded it only slightly two years ago. Yet, it still is fairly restrictive. There are few dispensaries, a doctor’s approval is required and, even with that approval, only a limited number of number of conditions can qualify for help.

Modest attempts to loosen the language for qualifying criteria haven’t even moved forward.

Democrats in the legislature have called for a special session to overturn the governor’s veto, but that is not likely to go anywhere. Republican lawmakers voted to expand the program, but they won’t turn it into a fight with the governor.

It seems to us that legislators who don’t want to stick up for their bill but who still want to help Iowans, ought to move swiftly and aggressively to put together a program that works in this new environment. What’s clear is that sticking with the status quo isn’t adequate.

— June 9