On Thursday, President Donald Trump abruptly announced a new 5% tariff on Mexico goods being sent into the United States — with other percentage escalations planned for the future.

Judging by media comments, the American people are not in love with tariffs that could raise the cost of cars, wholly or partially built in Mexico, possibly as high as $1,300 per vehicle.

“On June 10, 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,” Trump wrote. “The tariff will gradually increase until the illegal immigration problem is remedied … at which time the tariffs will be removed.”

He wrote that details from the White House will follow.

“If Mexico still has not taken action to dramatically reduce or eliminate the number of illegal aliens crossing its territory into the United States, tariffs will be increased to 15% on Aug. 1, 2019, to 20% on Sept. 1, 2019 and to 25% on Oct. 1, 2019,” Trump said in a statement released by the White House on Thursday.

On Friday, Mexican President Andres Manuel Lopez Obrador insisted that he wanted to avoid a clash with Washington, but would defend the interests of his country.

He said at a regular press conference, he would send his Foreign Secretary Marcelo Ebrard to Washington to discuss the issue.

The Mexican president said that he believed Trump would understand that in due course, the tariff threat was not the way to resolve the matter and stressed the Mexicans had united behind the government.

On Friday, it was reported that United States markets fell across the board.

U.S.-China trade negotiations are at an impasse. The U.S. has also threatened to tax automobiles from Japan and the Europeans Union. Mexico negotiated revisions to Nafta (the North American Free Trade Agreement) and agreed to the new U.S.-Mexico-Canada Agreement (USMCA), only to be hit with the new tariffs which are not related to any trade dispute.

Republicans, including some of the president’s loyalists, view the action as a “misuse of presidential tariff authority.” They warned that, should the president follow through with his threat, it could derail the United States-Mexico-Canada Agreement.

The trade deal still requires approval at the congressional level for all three countries. Republicans warned that the new tariffs could shift the financial burden to American consumers, as tariffs often do, and hurt the economy.

On Friday, markets reacted quickly. The Mexican peso weakened against the American dollar, while shares of Japanese automakers fell because many of them have manufacturing facilities is Mexico.

U.S. consumers are not going to like paying higher prices on hundreds of products, grown or manufactured in Mexico. We may even face an avocado shortage.

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