Trump threatens tariffs on Mexican goods over border security issues
Tweet first, answer questions later, continues to be M.O. Trump uses to engage in international Trade politics. One of his most recent tweets fell at the intersection of two key issues, illegal Mexican immigration and trade tariffs. On May 30th Trump announced his intention to implement a broad-reaching tariff.
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 Tariff will gradually increase until the Illegal Immigration problem is remedied,..— Donald J. Trump (@realDonaldTrump) May 30, 2019
While the illegal-immigration reform impetus was clear in the President’s first tweet, it quickly became muddled as Chinese trade and Mexico were mentioned in the same thread. Trump noted that Mexico “has taken 30% of [the United States’] auto industry” and asserted that these companies will leave Mexico to return to the United States if tariffs are implemented. On May 31st, Trump concluded a series of tweets on the trade issues with a split focus on border security and equal trade.
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!— Donald J. Trump (@realDonaldTrump) May 31, 2019
As of now, it looks like the White House plans on rolling out increasing tariffs in 5% increments beginning June 10th, on ALL goods. Specific guidance related to particular industries has not yet been issued. For risk planning purposes it is wise to assume automotive carve-outs will not be issued, especially since they represent the largest category of imports from Mexico. Mexican President Andres Manuel Lopez Obrador (AMLO) is sending a delegation to Washington and is confident they’ll be able to reach an agreement. The challenges of managing a relationship with Trump are constantly evolving for foreign politicians. On the Canadian front, U.S. active White House Chief of Staff, Mick Mulvaney said the Mexican tariff threats were “not interrelated” with the U.S.-Mexico-Canada trade deal. On May 30th U.S. Vice President Pence was in Ottawa, Canada to discuss USMCA and trade with Canadian Prime Minister Justin Trudeau, the positive free-trade sentiment following those talks was echoed in an interview with the VP the following day.