On May 30, President Donald Trump said the U.S. will set a 5 percent tariff on all goods from Mexico until the country makes efforts to reduce illegal immigration to the United States. “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,” Trump wrote on Twitter.
Trump also tweeted that the tariffs would increase until the “problem is remedied,” and said details of the tariffs would follow. In 2018, nearly 14 percent of all U.S. imports came from Mexico. Top states that would be affected by the tariff include Michigan, Texas and Arizona.
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The tariff threats come nearly two weeks after the U.S., Canada and Mexico had reached a deal to lift Trump’s steel and aluminum tariffs, and subsequent retaliatory tariffs. Both Canada and Mexico said those tariffs would impede progress in ratifying the U.S.-Mexico-Canada Agreement, which would replace NAFTA.
In 2018, 13.6% of all imported goods to the U.S. came from Mexico
Tariffs on all Mexican imports would hit a range of consumer goods, from food and fresh produce to household products and appliances. U.S. consumers would likely pay the price.
“The evidence is, those prices get passed all the way through,” said Sherman Robinson, nonresident fellow at the Peterson Institute for International Economics, who added the announcement was a “very worrisome development” that is “completely in violation of our commitments to the WTO.” Robinson explained that the tariff rate increase could affect low-income Americans more than others.
“A lot of this stuff is the low-end, so it’s going to really hit Walmart, Target,” and similar retailers, he said. “And that will disproportionately hit poor consumers.” Robinson predicted the U.S. auto production industry would also be hurt by the tariffs, and that U.S. farmers could be hurt if Mexico retaliates.
Share of states’ and District of Columbia’s imports from Mexico in 2018
The president faces opposition from various industry groups and policymakers, including House Speaker Nancy Pelosi (D-Calif.), who in a statement said the president “demonstrated a further lack of understanding of the recklessness of his actions by threatening tariffs on Mexico.”
“Yet again, the President is sowing chaos over the border instead of delivering solutions for American workers and for American consumers,” Pelosi said.
Sources:U.S. Census Bureau, U.S. Department of Commerce, POLITICO Pro reports