President Trump said he will impose a 5 percent tariff on Mexican imports until the country stops “illegal migrants” from crossing the U.S. southern border.
“These measures aren’t beneficial for Mexicans or Americans,” Mexican President Andrés Manuel López Obrador said in a press conference Friday, according to Bloomberg News.
Trump said Thursday that he would impose a 5 percent tariff on all Mexican imports on June 10, rising incrementally to 25 percent by October “until the illegal immigration problem is remedied, at which time the tariff will be removed.”
The president added he would only remove the tariffs if all illegal migration across the border ceased, though other White House officials said they will be looking only for Mexico to take major action, according to The Washington Post.
Mexico vowed a response that could send the Trump administration into a full-scale trade war with one of its largest trading partners just days after the White House and China imposed stiff duties on each other’s exports.
Vice President Pence was in Canada on Thursday meeting with Prime Minister Justin Trudeau about ratifying an updated version of the North American Free Trade Agreement with Mexico. It was unclear if Trump’s newest tariff threat could upend those discussions.
Shares of the largest U.S. automakers dropped in premarket trading this morning in response to the announcement, according to CNBC News.
Republican Senate Finance Committee Chairman Charles E. Grassley of Iowa called the move a “misuse of presidential tariff authority and contrary to congressional intent.” Implementing the tariffs, he said, would “seriously jeopardize passage” of the United States-Mexico-Canada Agreement.
If the administration determines that Mexican authorities have not done enough in response, the tariff would increase to 10 percent July 1, then continue rising in 5 point increments at the start of each following month until it reaches 25 percent Oct. 1.
The president’s new tariff would “essentially blow up USMCA,” Rufus Yerxa, president of the National Foreign Trade Council, told the Post. “The economic impact will be devastating on both sides of the border.”