U.S. and China Play Chicken on Trade, and Neither Swerves

At the heart of the intensifying trade dispute between the United States and China is a fundamental question: Which country is more willing to endure short-term pain for the long-term gain of playing a leading role in high-tech industries.

China has embarked on an aggressive and expensive plan to retool its economy for the future as it moves to dominate in robotics, aerospace, artificial intelligence and more. President Trump has said China’s approach relies on unfair and predatory practices, and on stolen American technology. And even as Chinese leaders say they want to avoid a trade war, they are staunchly defending their plans and showing little sign of backing down.

Mr. Trump’s threat to sharply escalate the administration’s tariffs on Chinese imports — a threat he reiterated on Friday — shows that neither side has yet gone far enough to persuade the other to compromise. Bigger and broader tariffs may be necessary to get China’s attention.

“The administration, if it’s serious, better be prepared for much more,” said Derek Scissors, resident scholar at the American Enterprise Institute.

China’s $300 billion plan for government assistance, Made in China 2025, calls for helping cutting-edge industries by providing low-interest loans from state-controlled banks, guaranteeing large market shares in China and offering extensive research subsidies. The goal is to help Chinese firms acquire Western competitors, develop advanced technology and construct immense factories with considerable economies of scale. It is an agenda that China would probably go to great lengths to protect. “We will not start a war — however, if someone starts a war, we will definitely fight back,” Gao Feng, the commerce ministry spokesman, said at a news conference in Beijing on Friday. “No options will be ruled out.”

 For the United States, victory in such a war would be difficult to verify, much less achieve. China could say it plans to ease back on government support. But that could be difficult to quantify because of the country’s opaque political system and the state’s control of information. China could back off from rules that favor local competitors and require American companies to share technology if they want access to the Chinese market. For example, foreign automakers face pressure to transfer electric-car technology to their local partners, and foreign technology companies are increasingly required to submit to security reviews. Foreign businesses have long complained that many of the rules they must follow are unwritten.

China’s government-financed campaign is already paying off in some ways. Drive into downtown Shanghai from Pudong International Airport and you pass a seemingly endless series of huge hangars and vast, glass-walled design centers, all part of the country’s effort to create a commercial aircraft manufacturing giant to rival Boeing or Airbus. Travel to factory districts in Shanghai and on the outskirts of many other Chinese cities and you see enormous, newly built factories ready to churn out electric cars, the batteries they use and other components.

Proving that the Chinese government unfairly supports the effort could be difficult, however.

The United States could press its argument with the World Trade Organization, which oversees global trading rules and prohibits big loans from government-controlled banks at artificially low interest rates. But the W.T.O. requires many contracts and government documents to prove cases, evidence that can be hard to get in a tightly controlled country like China.

Even when the W.T.O. rules against China, persuading the country to comply can be challenging. One such ruling, involving China’s restrictions on foreign electronic payment systems, was issued nearly six years ago. China is still mulling how it will comply — despite numerous complaints from the Obama administration and more recent nudges from the Trump administration.

The U.S.-China Trade Conflict: How We Got to This Point

American companies want a level playing field with their Chinese counterparts. China wants to build its industries into sophisticated global competitors. This week, both countries demonstrated a willingness to escalate trade tensions to defend their positions.

So the United States has turned to tariffs. That means it is using a 1980s tool to address an industrial policy issue that is already shaping the 21st century.

Mr. Trump’s top trade official, Robert Lighthizer, was a deputy United States trade representative under President Ronald Reagan. The tariffs that Mr. Lighthizer threatened against Japan in those days are among the same ones he is wielding now. But the two periods differ in two big ways.

One is that Japan depended on the United States in the ’80s for military protection from the Soviet Union. China, by contrast, is an increasingly assertive global rival, sending naval vessels to the Baltic Sea and building a naval base in East Africa.

The second major difference between then and now is that the European Union deeply resented the tariffs of the 1980s, and Mr. Trump’s use of them could make it difficult to persuade European officials to present a united front. In response to American tariffs, Beijing could simply shift business from American companies like Boeing and Ford to European rivals like Airbus and Daimler.

Chinese officials dispute the American accusations about their unfair trade practices. They say Mr. Trump’s tariffs violate W.T.O. rules, and they dispute claims that China forces American companies to hand over technology. As for Made in China 2025, Chinese officials say the plan is only guidance, not a government directive — and that foreign companies are free to participate, too.

In China’s current industrial policy, the Trump administration sees an extension of how the country has already come to dominate one major industry of the future: solar power. Mr. Trump himself is no fan of solar panels. He has spoken enthusiastically about coal, not renewable energy, throughout his campaign and his presidency. But the solar power industry is one of the biggest success stories so far in China’s efforts involving advanced industries.

The United States played a central role in developing solar panels and manufacturing them until a decade ago. Around then, the Chinese government decided to finance a lavish expansion of the sector. State-controlled banks lent tens of billions of dollars at low interest rates despite the high-profile bankruptcies of solar manufacturers.

Chinese firms now produce three-quarters of the world’s solar panels. Most American and European companies have closed factories, and many have become insolvent. China’s success in producing solar panels has given Beijing a blueprint for seizing the lead in a long list of other high-tech industries.

Many foreign companies are caught between China’s industrial ambitions and Washington’s efforts to stop them, including major aerospace companies and carmakers. The conflict may spread: Made in China 2025 could create major competitors to General Electric and Intel, and to companies outside the United States like Siemens and Samsung.

Tariffs could hurt such companies if the United States and China follow through on their plans. They also risk losing their competitiveness if Beijing succeeds in subsidizing the creation of large Chinese rivals in their industries.

Boeing, for example, could be hit by American tariffs on civilian aircraft parts it buys from Avic, a state-controlled Chinese military and aviation company — required purchases if the company, which is based in Chicago, wants to sell planes in China. China, in turn, is pushing a consortium that includes Avic to become a Boeing rival. Boeing, like other multinational companies, has refrained from endorsing or criticizing the tariffs.

“Although our members are unhappy with retaliatory tariffs being used,” said Kenneth Jarrett, the president of the American Chamber of Commerce in Shanghai, “there is a belief that greater pressure has to be brought to bear on China.”

From the New York Times

AS FATE OF NAFTA CHAPTER 11 HANGS IN BALANCE, MEXICO IS REPORTEDLY THREATENED WITH MORE CLAIMS

As the political debate about the ultimate fate of NAFTA Chapter 11 heats up, Mexico is reportedly facing a pair of notices of intent to arbitrate – a first step to pursuing arbitration under Chapter 11.

In the first case, a foreign investor in Mexico’s energy sector has reportedly invoked its rights under the NAFTA. In a second dispute, discussed further below, another US investor has reportedly lodged a notice of intent, for alleged denial of justice.

The first dispute centers on Mexican petroleum services company, Integradora de Servicios Petroleros Oro Negro, S.A.P.I. de C.V. (or Oro Negro)

Oro Negro was established in 2012 and owns five oil rigs operating in the Gulf of Mexico, contracted to PEMEX. In 2016, affiliates of the Mexican investment firm Axis Capital Management became the major shareholder in the company.

In 2015, Mexican state oil company PEMEX reportedly cut the day rates of Oro Negro’s rigs, allegedly in response to falling oil prices. Since then, Oro Negro has faced financial difficulties, undergoing restructuring, and reportedly defaulting on overseas bonds.

In August 2017, Oro Negro released a statement outlining a series of contractual amendments requested by PEMEX, including the temporary suspension of operations of Oro Negro’s five rigs, to be followed by the resumption of operations at further reduced day rates. The statement claims that PEMEX threatened to terminate its contracts with Oro Negro if it failed to accept these terms. The company initiated bankruptcy proceedings in November 2017.

According to local media, foreign investors in Oro Negro have presented Mexico with a Notice of Intent to pursue a claim under NAFTA.

Mexico reportedly threatened by a new dispute, after judge cites Calvo clause to dismiss commercial arbitration proceedings

Meanwhile, US tile manufacturer Dal-Tile has reportedly put Mexico on notice of a dispute under NAFTA, claiming that it suffered a denial of justice when a local judge sought to stop a commercial arbitration initiated by the American investor over a joint-venture in Mexico.

The commercial arbitration involved Dal-Tile and Interceramic, Dal-Tile’s majority partner in the local joint-venture, Recubrimientos Interceramic. In 2016, Dal-Tile proposed to buy out Interceramic’s 51% stake in the joint-venture with a view to liquidate it, but Interceramic’s refusal prompted Dal-Tile to initiate an arbitration with the ICC in November 2016 under the joint-venture’s by-laws. The arbitration was seated in Houston.

Interceramic however went before a local civil court in the Mexican state of Chihuahua, where a first-instance judge granted provisional measures to stop the arbitration in its track. The judge notably relied on the “Calvo clause” (or doctrine) to rule that the dispute should be adjudicated in local courts.

At first glance, Dal-Tile’s claim for denial of justice against Mexico, if averred, might stumble on the generally-accepted requirement of exhaustion of remedies. Yet, as we recently reported in the context of Merck’s arbitration against Ecuador, the early start of an arbitration might not prevent remedies to be exhausted before a tribunal finally renders its award.

Short URL: http://tinyurl.com/yan8y6wj

As trade issues become increasingly prominent in the national political agenda we must maintain that there can be no trade justice without economic justice.

As loud as Trump can be about his announcements on global trade, his policies have still resulted in no tangible benefit for workers or the environment. To the contrary, his tax bill, immigration policies, and the attack on labor, financial, and environmental regulations have represented constant attacks against working class communities across the country.

Amidst this highly unstable week at the White House, the Trump administration has announced $50 billion worth of Chinese imports. The administration has also retracted its initial bluff to impose tariffs on steel and aluminum imports from countries that are political allies to the government such as the European Union, Brazil, Australia, Argentina, and South Korea in addition to the exemptions already given to Mexico and Canada. The tariffs on China come after repeated calls from the defense community to not upset allies with the global sanctions, especially if the point is to target dumping by China’s steel industry.

The announcements confirm the thesis we were proposing last week: that Trump’s economic nationalism leans into war-mongering discourse and bullying tactics regardless of actual intentions to follow through on the threat. The administration has a communications strategy aimed at emitting the perception that Trump represents a revitalization of American global hegemony. Most folks will not get past the major headlines on the potential threat of a trade war, never learning that the United States Trade Representative is actually giving an exemption to the US’s major steel importers.

The same pattern can be observed with Trump’s leaving the Trans-Pacific Partnership and seeking to re-negotiate NAFTA. While we celebrate the end of the TPP in the US and urgently believe NAFTA must be replaced with a deal that benefits workers and protects the environment, we also see that Trump’s actions have not generated any of the progress we so urgently need to be seeing. While there has been slow and loud action on trade, Trump and the Republican Party have continued to go against the working class by eliminating protections and passing a tax bill that will further wealth inequality. While NAFTA negotiations drag on with no real commitments to enforce labor standards, the Environmental Protection Agency (EPA) is being dismantled and the Keystone XL and the Dakota Access pipelines were given the green light.

The tariffs imposed on China could do well for US industries harmed by the dumping of Chinese products on the global market. But Trump must know that the social movements of the United States will not tolerate blaming all of the US’s problems on other countries or on people of color when it is major corporations and corrupt politicians who are responsible for the incredible inequality, the constant attack on workers’ rights, and the environmental destruction that this country and much of the world faces. We want real change both on domestic and international policy that puts people and the planet before profits and war-mongering.

From Flush the TPP

USTR scraps official NAFTA round eight this week, hosts ministerial meetings instead

U.S. Trade Representative Robert Lighthizer has decided against hosting an official eighth round of NAFTA negotiations and instead will hold ministerial meetings with his counterparts in Washington, DC, this week, hoping to make progress in the most sensitive areas and lay the groundwork for an agreement in principle by mid-April, sources close to the talks tell Inside U.S. Trade.

Canadian Foreign Affairs Minister Chrystia Freeland and Mexican Economy Secretary Ildefonso Guajardo will meet separately with Lighthizer, these sources said, with a trilateral meeting set for Friday. Both officials will come to DC with their chief negotiators and other senior political staff as well as several chapter leads, leaving some observers to argue this week’s meetings are akin to a negotiating round “but no one wants to call it that,” one source said.

“Effectively a round is occuring right now with so many tables meeting,” another source said. “It’s a round but it’s just not called that.”

The three countries are expected to flesh out an agreement in principle that President Trump, Prime Minister Justin Trudeau and President Enrique Peña Nieto could announce at the Summit of the Americas in Lima, Peru, which begins on April 13. Sources told Inside U.S. Trade Lighthizer will accompany Trump to the summit.

USTR’s chief agricultural negotiator, Gregg Doud, told stakeholders this week that the White House was pushing for an agreement in principle by then, people briefed on the conversation said.

The Lima summit will be the first and likely the last event the three heads of state will participate in together, as Mexico will elect a new president on July 1. Two planned state visits between Peña Nieto and Trump were canceled after Trump repeatedly insisted Mexico would pay for a planned border wall.

USTR for weeks has sidestepped questions posed by congressional staff, stakeholders and its trading partners about the timing and logistics of an eighth round, but sources said Lighthizer told his counterparts weeks ago that he was opposed to holding another formal negotiating session and said he prefered finalizing any outstanding issues at the ministerial level. USTR did not respond to a request for comment.

Some said it was not uncommon for ministers to handle the final stretches of negotiations this way and to seek a shortcut to a deal with so little time left in the political calendar.

“USTR can construe a mini-ministerial as news if it wants to build the narrative that the parties are close enough to conclusion to no longer need to conduct regular rounds and now are at a stage where ministers are engaging on final trade-offs,” one source said.

“If so,” the source added, “the agenda will be about the key sensitive issues and trade-offs between them.”

Some congressional staff members and stakeholders, on the other hand, believe the tactic is risky and flawed given what they perceive as a number of “process fouls” USTR has committed throughout the NAFTA negotiations — and given the proposals the administration put forward over the objections of key lawmakers and some administration officials.

A ministerial-level push without Capitol Hill involved is especially risky when engaging in final trade-offs, one aide contended, stressing that in a “normal” negotiation USTR is supposed to consult with Congress on compromises to gauge their feasibility for members and stakeholders as well as their impact on the whip count.

Republican and Democratic aides, however, said Lighthizer’s strategy to cut out Congress and stakeholders made sense because he is “calling [the Republicans’] bluff,” as one put it.

Lighthizer is facing pushback from the chairmen of the key congressional trade committees on a number of proposals he has advanced in the talks with Canada and Mexico, but observers from both sides of the aisle said they doubted the chairmen or a majority of GOP members — despite public criticism of Lighthizer’s approach — would in the end reject a deal if the president backed it.

Sources said the talks to date have advanced well in areas where all parties saw a need for modernization, but that negotiators remained stuck on a number of chapters in which USTR has not signaled it could make compromises.

Mexican and Canadian sources as well as many key players in the U.S. business community have faulted the Trump administration for what they see as a lack of political direction in the NAFTA talks.

These sources said direction from Lighthizer and his political team was needed to clear many outstanding roadblocks — either in chapters in which the countries have to hammer out so-called “endgame issues,” or in areas where USTR’s initial proposals were not workable for its trading partners but career staffers have not received guidance to move off those approaches.

“Canada and Mexico have nothing useful on landing zones,” one outside adviser said. “It seems to still be ‘take it or leave it.’”

One source close to the talks said the ministerial meetings this week “should lead to clear instructions for further technical meetings with all groups under one roof.” The source added that it was “imperative to have intense technical meetings if we are to advance.”

Many outside advisers and observers agreed that even if an agreement in principle was announced this month, a large amount of technical work would remain before a substantive agreement could be reached — and getting there, they say, will require unprecedented engagement from USTR at the negotiating table.

“The onus is on USTR to at least — they don’t have to back off their positions — but at least show some flexibility on the issues,” one private-sector source said. “I think there could be some positive momentum here, but real progress really depends on USTR.”

Mexico’s chief negotiator, Kenneth Smith Ramos, tweeted on Tuesday that the “NAFTA modernization process is entering a phase of intensive Ministerial engagement. #MX will continue to work constructively and it will be the substance of the #negotiation that drives any potential conclusion. Goal: a stronger and modern #NAFTA.”

Sources said the Trump administration, on the other hand, appeared to have been exerting pressure for a compressed time frame in an attempt to arrive at its desired conclusion — including extracting concessions from its neighbors in return for permanent exemptions from Section 232 tariffs on steel and aluminum.

Sources told Inside U.S. Trade last week that Lighthizer had been pushing for an agreement in principle to be announced by March 31 and that he wanted it finalized by May 1, the day Mexico and Canada’s exemptions for Trump’s steel and aluminum tariffs expire.

Mexican Economy Secretary Ildefonso Guajardo last month rejected the end-of-March deadline and the pressure that would come with an agreement in principle announced despite a raft of unresolved issues, they said. Instead, the three countries agreed to close out seven additional nearly completed “modernization” chapters by the end of this week.

A private-sector source said “those are not what you consider deal-breaking chapters, of course,” but several sources said wrapping up those chapters would send a positive message and lay more groundwork for an announcement at the Lima summit.

Sources disagreed on how much advancement would be beneficial to congressional Republicans who would be forced to make NAFTA an election issue and defend a deal that might fall short of some of their demands.

One source argued that even if the time line Lighthizer was pushing for was “partially aspirational, it shows the leverage USTR has over our trading partners with a crazy president.”

“In a way, Lighthizer has leverage on Trump to move quickly and be reasonable,” the source said. “If Trump can say he has achieved a good NAFTA it might help with the midterms. And Lighthizer can say it’s safer to get NAFTA done right now when [Republicans] control all the levers of power.”

Another said an agreement in principle was “the best thing that could happen” to those members because it would “keep the president happy” and would allow the countries to put the talks “on ice” for the foreseeable future and avoid making NAFTA a possibly “toxic” election issue.

An area that will be closely watched by many this week is NAFTA’s automotive rules of origin. USTR late last month floated a revised proposal that would factor wages into the regional value content metric that determines if a car qualifies for duty-free treatment under NAFTA.

Talks on the new autos proposal to date have been conducted largely bilaterally, and both Mexico and Canada have said they must further analyze the offer and consult with their domestic industries. People briefed on USTR’s proposal said it did not include a specific methodology and was lacking important information on how it would be implemented and administered — and that negotiators and stakeholders were looking for more detail on those in the meetings this week.

“Successful auto negotiations will depend on achieving clarity on rules of origin because the speed and scope of the industry makes it impossible to administer without them,” Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, told Inside U.S. Trade. “The question that remains unanswered is whether we are at a stage that the three parties can confidently provide that to the sector.”

Guajardo on Monday said USTR was looking for a “quick solution” and that the negotiating teams “made a lot of progress, but on the complex issues, well, it looks like there’s a willingness to be flexible.”

Leading up to the Lima summit, there could be “the principal lines of understanding for solving complex issues,” he added, but the three sides are “not there yet.”

“The ministers need to get working together to get things settled,” he added, according to Reuters.

One private-sector source said Guajardo’s comments were “essentially acknowledging reality.”

“They want a milestone. They buy themselves huge time and scope to work on technical details,” the source said of a potential announcement of an agreement in principle. “But there is a big gap between desire and execution.”

Over the weekend and earlier this week, President Trump has used Twitter to bash NAFTA and link the negotiations to other issues. This weekend, he tied the talks to immigration reform and threatened to use NAFTA as a bargaining chip should Congress not act immediately.

“Mexico is making a fortune on NAFTA…They have very strong border laws — ours are pathetic,” Trump tweeted. “With all of the money they make from the U.S., hopefully they will stop people from coming through their country and into ours, at least until Congress changes our immigration laws!”

But some sources question how credible those threats could be, especially in light of the administration’s recent trade actions against China — remedies that have already spurred Beijing to retaliate against U.S. exports and threaten more moves.

“As the trade war with China commences, it’s inconceivable that Trump could also withdraw from NAFTA,” said Jamie McInerney, executive director of the Trade Leadership Coalition, an industry-backed pro-trade and pro-NAFTA organization. “Doing so would mean that U.S. farmers lose access to their three largest export markets — China, Mexico, and Canada — all at once. This could throw the agricultural economy into a full-on depression and would certainly incite further sell-offs in the stock market.” — Jenny Leonard (jleonard@iwpnews.com)

China hits back with tariffs on US imports worth $3bn

China has imposed tariffs of up to 25% on 128 US imports, including pork and wine, after US President Donald Trump raised duties on foreign steel and aluminium imports in March.

The tariffs affecting some $3bn (£2.1bn) of imports kick in on today. (Monday April 2)

Beijing said the move was to safeguard China’s interests and balance losses caused by new US tariffs.

China had previously said it did not want a trade war but would not sit by if its economy was hurt.

Mr Trump, however, has insisted that “trade wars are good”, and that it should be “easy” for the US to win one. The American authorities have already announced plans for further targeted tariffs for tens of billions of dollars of Chinese imports, the BBC’s Chris Buckler reports from Washington. They say that is in response to unfair trading practices in China that affect US companies but it raises the possibility of yet more action being taken in what has become a tit-for-tat trade battle, our correspondent adds.

Donald J. Trump

✔@realDonaldTrump

When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!

• US winemakers feel crushed by China tariffs
• Five reasons why trade wars aren’t easy to win
• What could China do in a US trade war?

China’s theft of foreign intellectual property is what sparked all this in the first place, according to Washington. If international companies want to operate in China they must hand over their intellectual property for the privilege, thus delivering the likes of German high-speed rail technology into the hands of Chinese engineers.

Yet now that China’s retaliatory tariffs have kicked in, there are also those sympathetic with that argument who are worried that launching a potential tariff war is not the way to fix the problem. Naturally others say China has been getting away with this for years and tough measures were needed in order to force change.

There is also the overall imbalance in US-China trade but a large Chinese surplus, of course, means it is potentially much more exposed during a trade war than America. For this reason Beijing will want to negotiate a way out of this escalating tariff showdown.

Its first set of tariffs are relatively mild but they come in response to the first round of US tariffs and a second has already been announced. There are plenty more American companies to be hit and other nations, especially those in Europe and Asia, could soon find themselves dragged into this conflict.

Which products are affected?

US scrap aluminium and frozen pork will be subject to a 25% additional tariff – on top of existing duties.

Several other American foods including nuts, fresh and dried fruit, ginseng and wine will be hit by a 15% increase.

Rolled steel bars will likewise see a 15% rise in duties.

• What is a trade war and why should I worry?
• Reality Check: Is Trump right about US trade deficit?

Why is this happening now?

China said the new tariffs were a retaliatory measure in light of Mr Trump’s decision to raise duties on steel and aluminium imports.

But further tax hikes may lie ahead.

On 22 March, the US said it was planning to impose duties on up to $60bn of Chinese imports and limit its investment in the US, in retaliation for years of alleged intellectual property theft.

The White House said it was acting to counter unfair competition from China’s state-led economy. It remains to be seen if China will follow its opening gambit with stronger measures.  In theory, Beijing could tax US tech companies like Apple, for example. Such a move could force US tech giants to raise their prices to compensate.

 From the BBC

Venting on Immigration, Trump Vows ‘No More DACA Deal’ and Threatens Nafta

PALM BEACH, Fla. — President Trump, blaming Democrats and the Mexican government for an increasingly “dangerous” flow of illegal immigrants, unleashed a series of fiery tweets on Sunday in which he vowed “NO MORE DACA DEAL” and threatened to walk away from the North American Free Trade Agreement.

Minutes after wishing the nation a happy Easter Sunday, Mr. Trump denounced “liberal” laws that he said were preventing Border Patrol agents from doing their jobs. He said that Republicans should use the “nuclear option” to sidestep Democratic opposition in the Senate and enact “tough laws NOW.”

It was unclear whether the president’s tweets represented any change in his immigration policy, or were just the sort of venting he is known to do after reading a newspaper article or seeing a television program. The president, who spent much of his holiday weekend golfing with supporters and watching television, was apparently reacting to a “Fox and Friends” segment on immigration that had aired minutes before.

Whatever his intention, Mr. Trump’s Twitter outburst captured the fickle tendencies that have driven his policy positions on immigration. On one hand, he has suggested at times that he is open to extending citizenship to millions of undocumented people. On the other hand, he has denounced those who have entered the country illegally as brutal criminals and raged about lax enforcement that he said had allowed immigrants to pour into the country.

In his tweets, Mr. Trump referred to “caravans” of immigrants heading north toward the United States-Mexico border — a subject that was addressed on the Fox program. A group of hundreds of Central Americans has been traveling through Mexico toward the United States, where some hope to seek asylum or sneak across the border. A reporter for BuzzFeed has been traveling with the group as it makes its way north.

As he walked into church in Palm Beach on Sunday morning, Mr. Trump did not respond to a question from reporters about whether his tweets meant that he would no longer support any deal for the young immigrants protected by the DACA program. But he said that “Mexico has got to help us at the border, and a lot of people are coming in because they want to take advantage of DACA.”

The Deferred Action for Childhood Arrivals program, known as DACA, gave protected status to hundreds of thousands of young immigrants brought to the country illegally as children. The program requires immigrants to have resided in the United States since 2007, meaning any crossing the border now would not be eligible.

Mr. Trump announced last year that he was ending the program, but courts have blocked his decision. He has said he is open to negotiating with Democrats on it, but has repeatedly backed away from potential deals that he argues do not include immigration changes that are tough enough.

Outside the church on Sunday, the president said the Democrats “blew it” after having “had a great chance.”

“But we’ll have to take a look,” he added.

Several Democrats challenged the idea that they were at fault for a breakdown in negotiations.

“‘NO MORE DACA DEAL’?!!” Representative Keith Ellison of Minnesota wrote on Twitter. “You were never doing a DACA deal. Your actions gave you away: cancelling DACA with no plan, making racist comments about Black/Brown immigrants, ejecting several by bipartisan deals. You didn’t fool anybody.”

Representative Dwight Evans, Democrat of Pennsylvania, said on Twitter that DACA recipients were “students, military service members, teachers, scientists, doctors, and lawyers — they are integral members of our community.”

Mr. Evans said the president’s comments were “simply unacceptable.”

The president’s remarks also drew a rebuke from a high-profile member of his own party. Gov. John Kasich of Ohio wrote on Twitter: “A true leader preserves & offers hope, doesn’t take hope from innocent children who call America home.”

Mr. Trump directed an equal measure of anger at Mexico, saying the country was “doing very little, if not NOTHING, at stopping people from flowing into Mexico through their Southern Border, and then into the U.S.” He said Mexican leaders “must stop the big drug and people flows, or I will stop their cash cow, NAFTA.”

“NEED WALL!” he added.

It was far from the first time that Mr. Trump has threatened to scrap Nafta as he pushes to change American trade policies that he says have hurt the United States economy and cost the country large numbers of jobs. The United States, Mexico and Canada are locked in difficult negotiations over a revamping of the trade pact.

The president’s tweets seemed at odds with some unifying steps taken last week by members of his administration: The homeland security secretary, Kirstjen Nielsen, met with President Enrique Peña Nieto of Mexico to discuss ways to work together on security and trade issues, according to a description of the conversation released by the Department of Homeland Security.

But Mr. Trump may have been hearing a harder-line administration voice over the weekend. He was accompanied to his Palm Beach resort, Mar-a-Lago, by Stephen Miller, a senior policy adviser who has shaped much of the administration’s tough stance on immigration.

The president, in his tweets, criticized what he called “Catch & Release,” a practice in which detained undocumented immigrants are sometimes released as they wait for a hearing before an immigration judge. In some cases, they are released because the government has nowhere to house them.

Critics say the practice — which, contrary to the president’s tweet, is not enshrined in law — gives the immigrants an opening to skip their hearing and settle undetected in the country. The Trump administration has declared an end to the practice, though it may take a while before significant changes are carried out.

Mr. Trump’s tweets on Sunday echoed remarks on “Fox and Friends” by Brandon Judd, the president of the National Border Patrol Council, whom the president has praised in the past.

“Our legislators actually have to stand up, and the Republicans control the House and the Senate, they do not need the Democrat support to pass any laws they want,” Mr. Judd said on the program. “They can go the nuclear option, just like what they did on the confirmation. They need to pass laws to end the catch-and-release program that’ll allow us to hold them for a long time.”

Mr. Judd also said that the “catch and release” policy was helping to lure the caravan of Central Americans to the United States.

A representative for a group called Pueblo Sin Fronteras, which organized the caravan, said that it would take four to six weeks before it reached the United States-Mexico border, and that the number of participants would be significantly smaller by then.

Most people are likely to drop out of the caravan in Mexico, rather than journey all the way to the border, the representative said, because they know they would be turned back by American border officials.

“Many of them know they won’t qualify for asylum. They are afraid of being detained,” said Roberto Corona, the group’s communications director, adding that most of them just wanted to reach Mexico, where they plan to speak with members of that country’s Congress.

Migrants who cannot prove that they face persecution or that their lives are endangered in their home country are unlikely to be allowed to remain in the United States. The Trump administration has also sought to increase detentions to deter would-be migrants.

New York Times