President Donald Trump sent shockwaves through the global economy on Thursday when he unexpectedly announced new tariffs that would be imposed on imports from Mexico. The tariffs could be avoided if Mexico took immediate action to address illegal immigration and the shared border crisis, which they may very well do.
Trump tweeted, “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,..”
“…. at which time the Tariffs will be removed. Details from the White House to follow,” he added.
It didn’t take long before that threat of economic consequences caused a reaction from Mexican leaders, according to a report from Reuters.
JUST IN: Mexico’s President Lopez Obrador asks Trump to have U.S. officials meet with the Mexican foreign minister in Washington on Friday to seek a solution that benefits both nations https://t.co/FqaPR9apcm pic.twitter.com/onyEIhklic
— Reuters Top News (@Reuters) May 31, 2019
Within hours of Trump’s tweets, Mexican President Andrés Manuel López Obrador called for a high-level meeting in Washington, D.C. involving top officials from both nations on Friday to try and seek an amenable solution.
Mexico has good reason to be concerned by the proposed tariffs, due to its position as a top trading partner with the United States, with tens of billions of dollars worth of goods moving across the border at any given time.
Reuters reported that China — which has also been hit with trade tariffs from President Trump — released a statement commiserating with Mexico against the Trump administration’s “trade bullying.”
The big difference is that China’s economy is believed to be large enough to withstand, for a time at least, a trade war with the U.S., while Mexico’s economy is far less robust in that regard.
To be sure, López Obrador had some choice words in response to the threatened tariffs.
“With all due respect, although you have the right to express it, ‘America First’ is a fallacy because until the end of times, even beyond national borders, justice and universal fraternity will prevail,” López Obrador, wrote in Spanish, according to Axios.
He added that “social problems are not resolved with taxes or coercive measures.”
It is worth noting that López Obrador refrained from threatening retaliatory economic actions and vowed to avoid a confrontation.
The White House issued an official statement detailing the long-standing crisis at the southern border, how Mexico has taken advantage of the U.S. while failing to live up to promises of assisting with illegal immigration, and how the new tariffs would work.
Starting at 5 percent on June 10, the tariff on all imports from Mexico would increase to 10 percent on July 1, followed by an additional 5 percent increase each successive month after that until it reached a maximum of 25 percent in October.
“Tariffs will remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” the statement read.
President Trump made it clear that the ball is on Mexico’s side of the court right now, and it is up to that nation to decide whether it will cooperate with regard to stemming the flow of illegal migrants through its territory or attempt to withstand a trade war with its top trading partner that could brutalize its economy.
Hopefully, the meeting Friday, and any additional meetings, went smoothly, and both nations can avoid a costly economic fight over issues as fundamental as national sovereignty and effective border controls.
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