Follow The Money

Grind for June 7th
“Do not judge me by my successes, judge me by how many times I fell down and got back up again.”

– Nelson Mandela

Deja Vu

The Headline

President Trump threatens to impose 5% tax on Mexican imports

The Grind

President Trump on Sunday promised to hit Mexico with new tariffs if the country doesn’t do something to stop the flow of illegal immigration into the United States:

“Mexico is an ‘abuser’ of the United States, taking but never giving. Either they stop the invasion of our Country…or our many companies and jobs that have been foolishly allowed to move South of the Border will be brought back into the United States through taxation (Tariffs). America has had enough!”

Trump’s threat comes amid a historic surge illegal border crossings.

CPB agents apprehended more than 1,000 people last week (the largest group ever detained at a single time) and detained nearly 58,500 families last month (an increase of over 100% compared to last May).

The Details

Trump plans to impose a 5% tariff on all Mexican goods starting June 10th. If Mexico fails to take action, the tax will increase to 15% in August, 20% in September, and 25% in October.

“Tariffs will permanently remain at the 25% level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” tweeted Trump. “Thousands of innocent lives are taken every year as a result of this lawless chaos. It must end NOW!”

US Trade Rep. Robert Lighthizer and other officials say the tariffs will complicate the approval process for the United States Mexico Canada Agreement (USMCA), which was negotiated to replace NAFTA.

On Sunday, acting White House Chief of Staff Mick Mulvaney told reporters the tariffs would not interfere with the USMC. “I fully expect these tariffs to go on to at least the 5% level on June 10th,” he said. “The president is deadly serious about fixing the situation at the southern border.”

Others worry the tariffs will raise the cost of living for American families and interfere with job growth.

“The President should reconsider the wisdom of this measure before it causes any real damage,” warned Rufus Yerxa, President of the National Foreign Trade Council. “[The tariffs] will cause untold harm to American manufacturers, consumers, and exporters.”

The Takeaway

The real problem here is that Mexico has no incentive to help the US tackle illegal immigration.

Mexico suffers no harm when migrants and drugs flow into the United States. In fact, many illegals who end up working in the US send money back to Mexico. Without massive pressure from the Trump Administration, Mexico has no reason to act.

“We need Mexico to step up and do more,” said DHS acting Secretary Kevin McAleenan, who called on Mexico to improve screening efforts along its border with Guatemala. “This is a controllable area,” he continued. “We need them to put their authorities down there and interdict these folks before they make this route all the way to the US.”

New Ideas

The Headline

Chinese researchers say fracking is more efficient with CO2

The Grind

In a new study, Chinese researchers describe an alternative method of fracking that utilizes carbon dioxide instead of water.

After testing the technique at five oil wells in northeast China, researchers determined CO2 created cracks much easier than water, leading to the recovery of up to 20x more oil.

“We chose CO2 fracturing from a range of options because the process includes multiple benefits,” explains researcher Nannan Sun. “However, we are still lacking fundamental understanding of the technology, which is greatly important for its further development and deployment.”

The Details

“Fracking” is drilling method wherein pressurized liquid is injected into the ground to create fissures and extract oil and gas.

Fracking is considered environmentally-friendly because it does not require the burning of fossil fuels, but has been criticized for damaging fragile ecologies, creating noise pollution, contaminating drinking water, and endangering the health of workers.

“Fracking liquid” is a mixture of water, sand, and chemicals. In theory, using CO2 instead of water would cut down on water usage and pollution.

Because up to 50% of fracking fluid remains underground after extraction, the new method could also help us remove some CO2 from the atmosphere.

This month, the concentration of CO2 in Earth’s atmosphere was recorded at 415ppm (the highest in human history). To compare, it was about 280ppm before the industrial revolution.

Did you know… The state with the longest coastline in the Continental U.S. is Michigan.