Trump Imposes 5% Tariffs On All Mexico Imports Starting June 10

Mexico is expected to push back hard against president Donald Trump’s punitive move to force it to stop immigrants from using its territory to enter the United States by raising tariffs on Mexican goods by 5% initially.

Trump gave Mexico one month to stop the immigrants before he doubles the new tariffs to 10% in July. Tariffs will ultimately be increased to 25% by October and will only be lowered at the “sole discretion and judgment” of Trump, said the White House.

Trump has consistently attacked Mexico for failing to do enough to stanch the surge of Central American migrant, mostly from El Salvador, Honduras and Guatemala, fleeing to the U.S in search of asylum.

At 6:30 a.m. on Friday morning, Trump tweeted his imposition of a 5% tariff on all Mexican imports starting June 10. Trump then threatened to levy more tariffs on Mexico, the second largest importer of goods into the United States, if Mexico refuses to take action to “reduce or eliminate the number of illegal aliens” crossing into the U.S.

Trump’s tweet reads: “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."

The U.S. president threatened that "the Tariff will gradually increase until the Illegal Immigration problem is remedied."

The White House later revealed more details about the new Trump tariffs, especially provisions certain to ignite outrage in Mexico.

“If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed. If the crisis persists, however, the Tariffs will be raised to 10 percent on July 1, 2019,” said the White House

“Tariffs will be increased to 15 percent on August 1, 2019, to 20 percent on September 1, 2019, and to 25 percent on October 1, 2019. Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory.”

The reaction on Wall Street, currently coping with nagging volatility from Trump’s trade war against China, will certainly be dire since Mexico is the largest foreign supplier of agricultural products to the U.S.

The U.S. imported $346.5 billion of Mexican goods in 2018 ($26 billion of which were agricultural), an increase of 10.3% from 2017. Mexico’s imports accounted for 13.6% of total U.S. imports in 2018.

Trump’s Mexican tariffs also jeopardize the approval of the U.S.-Mexico-Canada Agreement (USMCA) in both Mexico and the U.S.

Trump’s punitive move against Mexico came less than a day after U.S. Trade Representative Robert Lighthizer sent a letter to congressional leaders to jump-start the tedious process of approving the USMCA, which only makes minor amendments to the existing North American Free Trade Agreement or NAFTA.