In a tweet on Thursday, President Trump announced the U.S. will impose a 5 percent tariff on all Mexican imports starting June 10 due to the situation at the Southern Border. In addition, Trump announced tariffs could increase to 25 percent in the following months if Mexico does not take action to “reduce or eliminate the number of illegal aliens.”
According to a press release from the White House, Trump said, “To address the emergency at the Southern Border, I am invoking the authorities granted to me by the International Emergency Economic Powers Act. Accordingly, starting on June 10, 2019, the United States will impose a 5 percent Tariff on all goods imported from Mexico. If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed.”
“If the crisis persists, however, the Tariffs will be raised to 10 percent on July 1, 2019. Similarly, 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 percent on August 1, 2019, to 20 percent on September 1, 2019, and to 25 percent on October 1, 2019. Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory. Workers who come to our country through the legal admissions process, including those working on farms, ranches, and in other businesses, will be allowed easy passage.
To no surprise, this announcement had a negative effect on the markets when they opened this morning. Many agriculture groups are wondering where this leaves the progress for the passage of United States-Mexico-Canada Agreement.
Border Trade Alliance President Britton Clarke said, “At a time when we should be directing all resources and goodwill toward the congressional adoption of the USMCA, imposing tariffs on our trading partner Mexico will do severe damage to that effort. USMCA and NAFTA are about tearing down tariffs and strengthening the bonds of our two economies. This announcement will only hurt the American consumer and will be a tremendous drag on the U.S. economy.”