Trump Vows Rapid, High Tariffs on Mexico Unless Illegal Immigration Ends

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U.S. President Donald Trump, responding to a surge of illegal immigrants across the southern border, vowed on Thursday to impose a tariff on all goods coming from Mexico, starting at 5% and ratcheting much higher until the flow of people ceases.

Trump’s move dramatically escalates his battle to control a wave of tens of thousands of asylum seekers, including many Central American families fleeing poverty and violence, that has swelled alongside his promises to make it harder to get U.S. refuge and his efforts to build a wall on the Mexican border.

The announcement rattled investors who feared that worsening trade friction could hurt the global economy. The Mexican peso, U.S. stock index futures and Asian stock markets tumbled on the news, including the shares of Japanese automakers who ship cars from Mexico to the United States.

The president’s decision, announced on Twitter and in a subsequent statement, was a direct challenge to Mexican President Andres Manuel Lopez Obrador and took the Mexican government by surprise on a day when it had started a formal process to ratify a trade deal with the United States and Canada (USMCA).

It raised the risk of devastating economic relations with the biggest U.S. trade partner for goods. Mexico, heavily dependent on cross-border trade, rose to that ranking as a result of Trump’s trade war with China.

The measures against Mexico open up a new front on trade and if implemented are bound to trigger retaliation that would hit heartland, Trump-supporting farming and industrial states.

Higher tariffs will start at 5% on June 10 and increase monthly up to 25% on Oct. 1, unless Mexico takes immediate action, he said.

“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,” Trump said.

Lopez Obrador responded in a letter he posted on Twitter, calling Trump’s policy of America First “a fallacy” and accusing him of turning the United States into a “ghetto,” that stigmatized and mistreated migrants.

“President Trump, social problems are not resolved with taxes or coercive measures,” he wrote, adding that a delegation led by Foreign Minister Marcelo Ebrard would travel to Washington on Friday. He did not threaten to retaliate, saying he wanted to avoid confrontation.

Lopez Obrador pushed back against Trump’s assertion that Mexico let immigration happen through “passive cooperation,” saying: “you know we are fulfilling our responsibility to stop (migrants) moving through our country, as much as possible and without violating human rights.”

Determined to avoid a break down in Mexico’s most important bilateral relationship, since Trump threatened to close the world’s busiest land border over the migrant surge, Lopez Obrador’s government has drastically tightened controls on the movement of migrants, detaining and deporting thousands in recent months, while calling for U.S. aid to tackle root causes.

“We’re in a good moment building a good relationship (with the United States) and this comes like a cold shower,” said Mexico’s deputy foreign minister for North America, Jesus Seade, who had been in Mexico’s Senate delivering the USMCA trade deal for ratification shortly before the news broke.

In Beijing, Chinese foreign ministry spokesman Geng Shuang expressed sympathy with Mexico.

“The United States has repeatedly taken trade bullying action. China is not the only victim,” Geng told reporters.

Cross border trade between Mexico and the United States: https://tmsnrt.rs/2V59n2R

SIDING WITH HAWKS

Despite Trump’s assertion that Mexico could easily end Central American immigration, its relatively small security forces, also struggling with a record level of gang violence and homicide, are having a hard time controlling the flows.

In the biggest migrant surge on the U.S-Mexican border in a decade, U.S. officials say 80,000 people are being held in custody with an average of 4,500 mostly Central American migrants arriving daily, overwhelming the ability of border patrol officials to handle them.A senior White House official said Trump was particularly concerned that U.S. border agents apprehended a group of 1,036 migrants as they illegally crossed the border from Mexico on Wednesday. Officials said it was the largest single group since October. Before unveiling the tariff threat, Trump posted a video purporting to be of the crossing on his Twitter feed.

A source close to Trump said there had been a debate inside the White House over whether to go forward with the new policy, with immigration hawks fighting for it and others urging a more diplomatic approach. Trump sided with the hawks.

“The last thing he wants is to look weak,” said the source, who spoke on condition of anonymity.

Trump’s directive also spelled the potential for chaos for his efforts to get the U.S. Congress to approve the USMCA deal, which he negotiated as a replacement to the North American Free Trade Agreement between the United States, Mexico and Canada.

Doug Ducey, the governor of Arizona, which shares a 370-mile (595-km) border with Mexico, said on Twitter that he spoke to the White House and it was time for Congress to act on border security and the United States-Mexico-Canada Agreement.

“Everyone knows I am opposed to tariffs and deeply value Arizona’s relationship with Mexico. I prioritize national security and a solution to our humanitarian crisis at the border above commerce,” he said on Twitter.

Trump said he was acting under the powers granted to him by the International Emergency Economic Powers Act. He campaigned for election in 2016 on a vow to crack down on immigration.

Jaime Serra, Mexico’s former trade minister who negotiated the original NAFTA, told Reuters the announcement was unacceptable and “in total violation of NAFTA.” Another negotiator said Trump risked violating World Trade Organization rules.

WHITE HOUSE WANTS ACTION ‘TONIGHT’

White House acting chief of staff Mick Mulvaney, asked in a conference call with reporters which products from Mexico could be affected by the tariffs, said: “All of them.”

Mulvaney added, “We are interested in seeing the Mexican government act tonight, tomorrow.”

Shares in Toyota Motor Corp, Nissan Motor Co and Honda Motor Co all fell around 3% or more, while Mazda Motor Co fell nearly 7%. All four operate vehicle assembly plants in Mexico.

“Mexico is the U.S.’s largest trading partner and a flare-up in trade tensions was definitely not on the market radar,” said Sean Callow, a senior currency analyst at Westpac.

The benchmark S&P 500 e-mini futures dropped 0.82% to the lowest the contract has traded since early March. Investors scooped up safe assets, driving the yield on the 10-year U.S. Treasury note to 2.18%, the lowest since September 2017.

The dollar surged more than 2.5 percent against the Mexican peso.

(Reporting by Steve Holland, Eric Beech and Mohammed Zargham; additional reporting by Mica Rosenberg in New York,Noe Torres and Anthony Esposito in Mexico City, and Cate Cadell in Beijing; Editing by Grant McCool and Clarence Fernandez

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JAMES LEONARD PARK
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JAMES LEONARD PARK

WILL TARIFFS ON MEXICAN EXPORTS FIX ASYLUM PROBLEMS AT THE BORDER? MORE DIRECT SOLUTIONS. Tariffs on Mexico will have little or no impact on the problem of unauthorized migrants coming from El Salvador, Guatemala, & Honduras. Thousands of migrants from Central America now come to the SW border of the USA every day. They are seeking a better life in the United States. But they have not applied for authorized immigration. Recently, “asylum” has been their ticket to America. If they mention this magic word, they might be processed using new methods that do not apply to ordinary border-crossers. Mexico… Read more »

Bonnie Keever
Member

Long time coming

Cherl
Member

About time! Hitting in the pocketbook usually gets the attention needed to change a mess like we face now.

William Moore
Member

Why wasn’t this done sooner? Mexico could have stopped these many ‘caravans’ of migrants a long time ago but basically flipped the USA the ‘finger’. Why is this simple concept such a question? Really this should have been done a long time ago. And as for china, we should have been dealing with these disgusting, no good subhuman bastards and thieves with an iron fist. it’s the only way you deal with communists, pure and simple!

rcranger
Guest
rcranger

We are at this point only because the democrats refuse to do anything to change immigration laws in the US. Mexico is complicit in allowing these people to move freely to the US border. This disaster at our southern border must be stopped. I think Trump has been very patient with our legislative process in addressing the issue, but he’s run out of options dealing with the obstructionists in the House. In spite of what Morticia (Pelosi) and Gomez (Schumer) says, this is very much a national crisis!

Ronald
Guest

If you have a child that misbehaves (Mexico) do you place them in a time out or do you spank them lightly.
My position is to spank lightly until they respond. If they don’t correct their errant ways, you spank them harder the next time.
I understand this analogy, I wonder if Mexico will understand.

John Leonn
Guest
John Leonn

Put the funds in an Escrow account and that will effectively have Mexico pay for border infrastructure … good move

John Leonn
Guest
John Leonn

Good .. put the funds in an escrow account for the border wall ,,, and yes Mexico will be paying for it in this way ….They have the power to stop the illegal border crossers at their own southern border ,, and should do so ….

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