Trump to go ahead with tariffs on Mexico even as US stocks slide

United States President Donald Trump on Friday defended his threats to impose 5 per cent tariff on all goods coming in from Mexico to the US, even as Wall Street stocks opened sharply lower by fears of an escalation in trade tensions.

US President Donald Trump on Friday threatened to impose new tariffs, beginning June 10 with a first round of 5 per cent tariff, on all goods imported from Mexico to the US, as Wall Street and global stocks opened sharply lower over fears of an escalation in trade tensions.

In a series of tweets on Friday, Trump blamed US immigration laws, Democrats and Mexico for what, he believes created a situation that brought drugs and crime into US cities.

Trump wrote on his official twitter handle, "Mexico has taken advantage of the United States for decades. Because of the Dems, our Immigration Laws are BAD. Mexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem. Time for them to finally do what must be done!"

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Trump went on to say, "In order not to pay Tariffs, if they start rising, companies will leave Mexico, which has taken 30% of our Auto Industry and come back home to the USA. Mexico must take back their country from the drug lords and cartels. The Tariff is about stopping drugs as well as illegals!"

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Late on Thursday, Trump unveiled his plan to levy tariffs on the goods coming in from Mexico if the country does not step up its enforcement actions.

The official US statement warned that if Mexico did not act as Trump demanded, the first round of tariffs would begin on June 10 at five per cent "on all goods imported from Mexico". Tariffs would then go up to 10 per cent by July, 15 per cent by August, 20 per cent by September and reach 25 per cent by October if the demands aren't met.

The release stated that Trump would carry out his threat under authority from the International Emergency Economic Powers Act and that he would lift tariffs only "if the illegal migration crisis is alleviated through effective actions taken by Mexico".

Trump has repeatedly claimed that there's an influx of drugs and criminals from its southern border with Mexico. He has used these claims to justify and press for the construction of a wall on the US-Mexico border.

The third tweet read, "90% of the Drugs coming into the United States come through Mexico & our Southern Border. 80,000 people died last year, 1,000,000 people ruined. This has gone on for many years & nothing has been done about it. We have a 100 Billion Dollar Trade Deficit with Mexico. It's time!"

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The political and economic consequences of the move could be severe. Some of Trump's top economic advisers have raised concerns over this unprecedented decision, reports The Washington Post.

"There's a real risk that it could spiral into something that is not pretty," said Carlos Pascual, who served as a U.S. ambassador to Mexico during the Obama administration.

Mexico has pledged to provide an energetic response to Washington's threats.

"It would be catastrophic if Trump lived up to his threat of introducing tariffs over migration. That is why Mexico will not sit on its hands until June 10. If it happens, we will have to provide an energetic response," Sputnik quoted the Mexican Deputy Foreign Minister Jesus Seade as telling reporters.

The fresh threats come at a time when the US is already locked in a trade dispute with China.