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Trump says U.S. to impose 5 percent tariff on all Mexican goods

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Image: President Trump speaks to reporters as he departs for travel to Colo
President Donald Trump speaks to reporters at the White House as he departs for Colorado on Thursday. -
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Kevin Lamarque Reuters
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President Donald Trump said Thursday night that the United States would impose a 5 percent tariff on all Mexican goods starting next month, saying the sweeping tariffs would rise monthly to as high as 25 percent "until Mexico substantially stops the illegal inflow of aliens coming through its territory."

Trump has previously threatened to use trade as an incentive to persuade Mexico to reduce immigration through the southern border — in April 2018, he tweeted that Mexico must "stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!"

That was a reference to the 25-year-old North American Free Trade Agreement, which would be replaced by the United States-Mexico-Canada Agreement, or USMCA, which Trump, Mexican President Andrés Manuel López Obrador and Canadian Prime Minister Justin Trudeau signed in November.

López Obrador said in a letter to Trump that was made public late Thursday that he was sending his foreign minister to Washington on Friday.

"Social problems are not resolved with taxes or coercive measures," López Obrador said of the new tariffs.

"The Statue of Liberty is not an empty symbol," he said. "With all due respect, although it has the sovereign right to express it, the motto 'America First' is a fallacy."

Trump's announcement comes at a delicate time, with efforts to ratify the treaty under way in all three countries on Thursday.

Earlier Thursday, U.S. Trade Representative Robert Lighthizer sent a letter to congressional leaders to begin the ratification process, and López Obrador formally asked Mexico's Senate to ratify the deal. Meanwhile, Vice President Mike Pence was in Ottawa, the Canadian capital, to promote the agreement on Thursday.

But in a briefing for reporters, Mick Mulvaney, the acting White House chief of staff, said the tariffs wouldn't affect the USMCA deal.

"The two are absolutely not linked," he said, adding: "These are not tariffs as part of a trade dispute. These are tariffs as part of an immigration problem."

Asked whether Trump understood that tariffs are paid by importers, not exporters — in this case, by Americans, not Mexicans — Mulvaney said: "Americans are paying for this right now.

"Illegal immigration comes at a cost," he said. "The American taxpayer is paying for what's going on at the border."

At a news conference Thursday night, Jésus Seade, Mexico's undersecrtetary for foreign relations and the country's chief trade negotiator, called Trump's announcement "disastrous," the newspaper El Universal reported. "If it happens, we must respond energetically."

In a statement, the White House said the new tariffs would go into effect on June 10 and would rise by 5 percentage points every month — to 10 percent on July 1, 15 percent on Aug. 1 and so on — until they hit 25 percent on Oct. 1.

"Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory," it said.

Mulvaney said there was no specific target the United States expected Mexico to meet, saying the White House would assess the situation "on a day-to-day and week-to-week basis."

"We are going to judge success here by the number of people crossing the border, and that number needs to start coming down immediately in a significant and substantial number," he said.

Sen. Chuck Grassley, R-Iowa, chairman of the Finance Committee, which must act on the USMCA treaty, strongly criticized the tariff announcement.

"Trade policy and border security are separate issues," Grassley said in a statement, according to The Associated Press. "This is a misuse of presidential tariff authority and counter to congressional intent."

The trade representative's office estimated that U.S. imports of goods from Mexico totaled $346.5 billion last year, making it the United States' second-largest supplier of goods in 2018. Agricultural products were the biggest sector, totaling $26 billion of that, or almost 8 percent.

Normally, Congress, not the president, has the authority to raise taxes and tariffs, but the president can do so by declaring special circumstances that constitute a threat to national security.

That's the basis under which Trump raised tariffs on steel and aluminum imports on countries other than Mexico and Canada in March 2018. The president has long argued that what he calls illegal immigration is an existential threat to the nation's security.