U.S. President Donald Trump said he will begin a series of escalating tariffs on all Mexican imports beginning June 10 unless Mexico and U.S. lawmakers take immediate steps to stop the flow of illegal immigration into the United States.
In a dramatic and unexpected turnaround from an announcement on April 4 giving Mexico a “one-year warning” before considering such a move, President Trump, invoking authority from the International Emergency Economic Powers Act, announced late on May 30 that unless Mexico takes action, tariffs on imports starting at 5 percent in June would be increased to 15 percent on August 1, 20 percent on September 1, and then raised to 25 percent on October 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,” Trump said in a White House statement. “We welcome people who come to the United States legally, but we cannot allow our laws to be broken and our borders to be violated. For years, Mexico has not treated us fairly – but we are now asserting our rights as a sovereign Nation.”
Trump added that if Mexico fails to act, “tariffs will remain at the high level, and companies located in Mexico may start moving back to the United States to make their products and goods. Companies that relocate to the United States will not pay the tariffs or be affected in any way.”
Despite those promises, however, freight transportation and shipper interests have warned that a tariff regime on one of America’s biggest trading partners could have a devastating effect on supply chains, particularly on a U.S. automotive industry that relies on parts that sometimes must cross the border several times during the assembly process.
If tariffs are imposed, the trucking sector would likely be hit extremely hard as well. Speaking at the U.S. Chamber of Commerce on May 16, American Trucking Associations Chief Economist and Vice President of International Trade Policy Bob Costello pointed out that 32,000 U.S. truck drivers participate in cross-border freight moves, representing roughly $1.1 billion worth of cargo per day.
In laying out his case for tariffs, Trump also blamed his political adversaries and warned that U.S. immigration laws had to be changed as well.
“Democrats in Congress are fully aware of this horrible situation and yet refuse to help in any way, shape, or form,” Trump said in his statement. “This is a total dereliction of duty. The migrant crisis is a calamity that must now be solved – and can easily be solved – in Congress. Our broken asylum laws, court system, catch-and-release, visa lottery, chain migration, and many other loopholes can all be promptly corrected. When that happens, the measures being announced today can be more readily reduced or removed.”
