Apparently tariffs are like duct tape: there’s nothing they can’t do. With that in mind Donald Trump is going to try to use tariffs – specifically a 5% tariff on all U.S. imports from Mexico, due to take effect June 10 – in order to force the Mexican government to somehow stop illegal immigration over the countries’ shared border.
- Mexico is the U.S.’ single biggest trading partner, exporting $346.5 billion of goods to America and importing $299.1 billion.
- A 5% tariff on Mexican goods would end up costing American consumers around $17 billion per year, according to some estimates.
- As in trade disputes with China and others, Trump threatened to raise the tariffs at intervals if Mexico doesn’t take action to stop illegal immigration to the U.S. – as high as 25% by the end of the year.
- The Business Roundtable, a corporate lobbyist, immediately criticized Trump’s move in a statement reading in part: “Imposing unilateral tariffs on Mexican imports would be a grave error. Business Roundtable strongly urges the Administration not to move forward with these tariffs, which would create significant economic disruption and tax U.S. workers, farmers, consumers and businesses.”
- The BR added: “Moving ahead with these tariffs would also jeopardize the prospects for the Administration’s top trade priority – the United States-Mexico-Canada Agreement (USMCA) – and would undermine duty-free North American trade that supports over 12 million American jobs.”
- Mexican President Andrés Manuel López Obrador seemed to indicate concessions on migration are possible, but it remains an open question what Mexico can do to halt illegal crossings of the U.S. border, given the country’s history of weak governance.