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Trump gets pushback on promise of new Mexican tariffs

AP  |  Washington 

In a surprise announcement that could derail a major trade deal, President Donald Trump says he is placing a 5% tariff on all Mexican imports, effective June 10, to pressure the country to do more to crack down on the surge of Central American migrants trying to cross the U.S. border.

He said the percentage will gradually increase up to 25% "until the Illegal Immigration problem is remedied."

The decision showed the administration going to new lengths, and looking for new levers, to pressure Mexico to take action even if those risk upending other policy priorities, like the United States-Mexico-Canada Agreement, a trade deal that is the cornerstone of Trump's legislative agenda and seen as beneficial to his reelection effort.

It also risks further damaging the already strained relationship between the US and Mexico, two countries whose economies are deeply intertwined.

Trump made the announcement by tweet after telling reporters earlier Thursday that he was planning "a major statement" that would be his "biggest" so far on the border.

"On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP," he wrote. "The Tariff will gradually increase until the Illegal Immigration problem is remedied."


Mexican President Andrs Manuel Lpez Obrador responded in a public letter late Thursday, telling Trump that "social problems are not solved with duties or coercive measures" and alluded to the United States' history as a nation of immigrants. "The Statue of Liberty is not an empty symbol," he wrote.

He also said he was dispatching his foreign relations secretary to Washington on Friday to try to negotiate a solution.

In his growing fury over an increase in border crossings that he has likened to an "invasion," Trump has blamed Mexico for failing to stop the flow of asylum seekers from countries like El Salvador and Honduras who pass through its territory. And he has been itching to take increasingly radical, headline-grabbing action on the issue, which he sees as critical to his 2020 campaign because it energizes his base.

But the sudden tariff threat comes at a peculiar time, given how hard the administration has been pushing for passage of the USMCA, which would update the North American Free Trade Agreement. It comes less than two weeks after Trump lifted import taxes on Mexican and Canadian steel and aluminum, a move that seemed to clear an obstacle to its passage, and the same day that both Trump and Lpez Obrador began the process of seeking ratification. The deal needs approval from lawmakers in all three countries before it takes effect.

"The tariffs certainly put the USMCA on ice," said Gary Hufbauer, an expert in trade law at the Peterson Institute for International Economics, who panned the move but said Trump does have the legal authority to impose the tariffs under the International Emergency Economic Powers Act by citing a national emergency.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 31 2019. 20:45 IST
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