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Trump Says U.S. Will Hit Mexico With Tariffs on All Goods Trump Says U.S. Will Hit Mexico With 5% Tariffs on All Goods
(about 1 hour later)
WASHINGTON — President Trump said Thursday that he planned to impose a 5 percent tariff on all imported goods from Mexico beginning June 10, a tax that he said would “gradually increase” until Mexico stopped the flow of undocumented immigrants across the border.WASHINGTON — President Trump said Thursday that he planned to impose a 5 percent tariff on all imported goods from Mexico beginning June 10, a tax that he said would “gradually increase” until Mexico stopped the flow of undocumented immigrants across the border.
The announcement, which Mr. Trump hinted at on Thursday morning and announced on his Twitter feed, said the tariffs would be in place “until such time as illegal migrants coming through Mexico, and into our Country, STOP.” The announcement, which Mr. Trump made on his Twitter feed, said the tariffs would be in place “until such time as illegal migrants coming through Mexico, and into our Country, STOP.”
In a presidential statement that followed, he said that tariffs would be raised to 10 percent on July 1 “if the crisis persists,” and then by an additional 5 percent each month for three months.In a presidential statement that followed, he said that tariffs would be raised to 10 percent on July 1 “if the crisis persists,” and then by an additional 5 percent each month for three months.
“Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” the statement said.“Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” the statement said.
Mr. Trump’s anger over undocumented immigrants has been steadily increasing since January, after he failed to force Democrats to give him billions of dollars to build his long-promised wall along the southwestern border. Since then, he has moved to cut off all foreign aid to countries like Guatemala, Honduras and El Salvador, and threatened to completely seal off the border with Mexico, in an attempt to punish countries he blames for the flow of undocumented immigrants into the United States. The president’s threat was a significant escalation in his fight with Mexico and a drastic move against an American ally, which essentially dared the Mexican government to risk economic catastrophe on both sides of the border if it did not capitulate to the angry demands of the United States president.
His growing frustration of his own administration’s handling of immigration issues this year led to a purge of the top officials at the Department of Homeland Security, including its secretary, Kirstjen M. Nielsen. Previous administrations have tried to pressure the Mexican government to do more to stem the flow of migrants coming across the border and to combat drugs and other transnational crime. But no previous president has used the kind of blunt force threat that Mr. Trump wielded on Thursday night against a neighbor and an ally as critical to the American economy as Mexico.
Mr. Trump has previously threatened to tax cars flowing across the border with Mexico, saying in April that he would take such action if Mexico did not stop the flow of migrants and drugs into the United States. Mexico is one of Washington’s largest trading partners, sending across the border items like tomatoes, cars and rugs. Mexico sent the United States $346.5 billion of goods last year — meaning that a 5 percent tariff on those products would amount to a tax increase of more than $17 billion.
“If the drugs don’t stop, or largely stop, we’re going to put tariffs on Mexico and products, in particular cars — the whole ballgame is cars. And if that doesn’t stop the drugs, we close the border,” he said at the time. Mr. Trump’s frustration over the rising number of illegal border crossings has steadily risen since January, when Democrats refused to grant him billions of dollars to build his long-promised wall along the southwestern border. Since then, he has consistently framed immigration as a national security crisis and tried different tactics to punish the countries he blames for the flow of migrants.
Mr. Trump’s announcement of tariffs came the same day that his administration told Congress it planned to seek congressional approval of the new trade pact with Mexico and Canada, known as the United States-Mexico-Canada Agreement. He has moved to cut off all foreign aid to countries like Guatemala, Honduras and El Salvador, and threatened to completely seal off the border with Mexico, a move that numerous officials told him would violate American law and international treaties.
The president has used the threat of tariffs to try to pressure foreign leaders into taking a wide array of actions, like renegotiating trade deals as well as limiting the amount of metal or cars they ship to the United States. He later retreated from that threat by giving Mexico a “one-year warning” instead and threatening heavy auto tariffs on cars coming into the United States from Mexico. Mr. Trump also shifted hundreds of Customs and Border Protection agents from inspecting goods flowing into the United States to policing the southwestern border, a move that has disrupted trade by producing long wait times at border crossings.
In April, he threatened to place a 25 percent tariff on Mexican cars if the country would not take action to stem the flow of migrants through the southwestern border, walking back a promise he had made in the revised North American trade agreement to exempt Mexico from such a measure. His growing frustration at his administration’s handling of immigration issues this year led to a purge of top officials at the Department of Homeland Security, including the secretary, Kirstjen M. Nielsen. But he has continued to tell aides privately, and tweet publicly, that he believes Mexico could do more to prevent the problem at his doorstep.
The president has told his advisers that he likes tariffs because they can be done immediately and unilaterally. But tariffs are typically used to counter trade-related violations. But while Mr. Trump has made cracking down on illegal immigration a priority, his announcement on Thursday could derail another of his chief goals: Revising the North American Free Trade Agreement.
Such a move would also risk derailing relations with Mexico and Mr. Trump’s revised North American trade pact, which preserves the ultralow tariffs the original deal put into place. The announcement came the same day that his administration told Congress it planned to seek congressional approval of a new trade pact with Mexico and Canada, known as the United States-Mexico-Canada Agreement, which would preserve the ultralow tariffs the original deal put into place. To hasten approval of the deal in all three countries, Mr. Trump recently agreed to lift tariffs the United States had placed on steel and aluminum imports from Canada and Mexico. Those countries, in turn, agreed to lift punishing tariffs on American goods, including farm products like pork, whiskey, apples and cheese.
The announcement comes as the Trump administration started a congressional process on Thursday that both clears a procedural hurdle toward having Congress vote on the agreement and ramps up pressure on Speaker Nancy Pelosi and other Democrats who have called for substantial changes to the pact before it is ratified. Administration officials on Thursday portrayed the president’s move as a matter of national security, suggesting it would take priority over other goals.
The White House sent a draft “Statement of Administrative Action” to Congress on Thursday. Under congressional rules, that clears the way for the administration to submit an enforcement bill to Congress after 30 days, which in turn starts a 90-day clock for an up-or-down vote on the pact. “The situation is both a humanitarian and a border security crisis that has become a national emergency,” Kevin McAleenan, the acting secretary of homeland security, said in a conference call with reporters after the announcement, echoing the messaging that Mr. Trump has used relentlessly for the past several months.
That is likely to come as a challenge to Ms. Pelosi, who has recently told other lawmakers and union officials that Democrats are planning a study of the pact that could drag on well into the fall. In a statement, Ms. Pelosi described the move as “not a positive step. It indicates a lack of knowledge on the part of the administration on the policy and process to pass a trade agreement.” White House officials were vague about what actions by Mexico would satisfy Mr. Trump enough to postpone or cancel the tariffs. Mr. McAleenan said the Mexicans needed to do three things: increase security at the border with Guatemala, crack down on criminal gangs that help migrants and help the United States more with asylum seekers.
“We are going to judge success here by the number of people crossing the border and that number needs to come down substantially,” said Mick Mulvaney, the acting White House chief of staff. He added that the administration would judge Mexico’s actions on a “day-to-day, week-to-week basis.”
Mr. Mulvaney said the administration had consulted with leadership in both chambers of Congress before announcing the tariffs, saying that officials had “talked to Republicans more than we did Democrats.”
He later joked that the actual number of Democrats the administration had briefed was “zero.”
In the past, the president has used the threat of tariffs to try to pressure foreign leaders into taking a wide array of actions, like renegotiating trade deals or limiting the amount of metal or cars they ship to the United States.
In April, he threatened to place a 25 percent tariff on Mexican cars if the country would not take action to stem the flow of migrants across the southwestern border, walking back a promise he had made in the revised North American trade agreement to exempt Mexico from such a measure.
The president has told his advisers that he likes tariffs because they can be done immediately and unilaterally. He has already imposed tariffs on $250 billion worth of Chinese goods and threatened to tax nearly all Chinese imports. And the United States continue to tax metals from Europe, Japan and other trading partners.
But tariffs are typically used to counter violations related to trade. If the administration followed through with unilateral tariffs against Mexico, it is likely to face serious legal challenges.
In the statement, Mr. Trump said he was using authorities granted to him by the International Emergency Economic Powers Act, which gives the president broad power to take action to address any “unusual or extraordinary threat.”
But an across-the-board tariff on all Mexican goods would exact a serious toll on American consumers and corporations, and is likely to generate significant opposition among businesses.
Rufus Yerxa, the president of the National Foreign Trade Council, which represents the nation’s largest exporters, called the move “a colossal blunder.” “If not reversed, it will destabilize all our trade relationships while causing huge damage to our own industries,” he said.
The United States imports more from Mexico than any other country except China, including billions of dollars of cars, machinery, fuel, medical devices and many other goods. The country is also the United States’ largest supplier of agricultural imports, including cucumbers, grapes, beer and avocados.
The nations also share complex cross-border supply chains. Many of the products that Mexico sends to the United States, including cars and clothes, are made with parts or materials that were originally made in the United States.
Mexico’s deputy foreign minister for North America, Jesús Seade, said at a hastily arranged news conference on Thursday that Mr. Trump’s announced tariffs would be “disastrous” and suggested Mexico could retaliate against American products.
“This threat, if put into action, would be very serious,” he told reporters. “If it comes to pass, we — in my opinion — should respond in an energetic way.”
For now, he said, Mexican officials would make “discreet” contact with their counterparts in Washington to figure out “what we’re talking about and make sure that that isn’t really on the table.”
“There is no justification for doing this over migration,” he added.
Eswar Prasad, a professor of trade policy at Cornell University, said the tariffs would have “substantially disruptive effects on the tightly-woven supply chains in North America and portend even greater uncertainty in U.S. relationships with major trading partners.”
Immigration hard-liners, however, praised the move. “President Trump went out of his way to work with Mexico to alleviate this crisis,” said Stephen K. Bannon, the former White House chief strategist. “They failed to act. Now he dropped the hammer. The ratcheting up to 25 percent will get their attention.”