On Thursday, President Trump claimed that he would be imposing a 5% tariff on all goods that come from Mexico, unless Mexico does something to help with illegal immigration into the United States from its own country. It’s one of the most serious threats he has actually made regarding the border debate between the two nations, and if this does actually happen, it’ll have quite serious repercussions.
The plan of action right now is to levy these already heft taxes starting June 10th, but they could be escalated even higher if the demands regarding immigration aren’t met. In fact, the White House is planning on it. If their demands aren’t met, they’ll escalate the tariffs to ten percent on July 1st, with an additional five percent being added on for the next three months. This ultimate tariff of 25% will remain in place until Mexico “substantially stops the illegal inflow of aliens coming through its territory.”
….at which time the Tariffs will be removed. Details from the White House to follow.
— Donald J. Trump (@realDonaldTrump) May 30, 2019
Needless to say, this could have pretty serious whiplash for both countries. Tariffs such as these are paid by countries that import products, meaning it would be American companies importing Mexican goods that pay that massive 25% tariff. Naturally, they would seek to offset this somehow, which would likely mean increased costs for consumers. Last year, Mexico exported $346.5 billion in goods, and those products come across the border many times in some cases. One can see how a 25% increase in that number would be damaging.
Further, experts are of the mind that this will do nothing to stem the tide of illegal immigration; in fact, they claim it will only make it worse, and their logic is pretty solid. If the Mexican economy is severely damaged by these tariffs, the quality of living will drop, and thus, even more people will be looking to escape to a country with a better chance of success and quality living.
Naturally, Mexico promised a similar response if America carried out this plan, and needless to say, this would be very bad. Mexico is one of the country’s largest trading partners, so being on bad terms with them just doesn’t make sense; especially considering the situation with China right now, which worsened considerably just recently.
Whether or not Trump even has the power to do this is being questioned: the White House believes he very well could, due to a 1977 law that says he could impose tariffs on imports from an entire country if there is a national emergency. It just so happens that Trump declared a national emergency on the Mexican border not that long ago, so this could be the means of facilitating this decision that he needs.
The White House is still discussing the matter and determining how, if, and why it should be carried out. But considering the situation between the United States and Mexico right now, it’s unlikely that Trump will be satisfied with any measures the latter country takes on immigration, and that could be disastrous for both of our economies.