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.

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.

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.

03 June 2019