President Donald Trump announces 5% duties on all goods imported into the US from Mexico starting June 10th. Duties that will then gradually increase until illegal immigration is stopped. "At that point, the rates will be removed," Trump said via Twitter.
"Duties will remain at 25% until and unless Mexico stops the flow of illegal immigrants," says Trump.
The tariffs will gradually rise to 25% from October 1st "unless - or until - Mexico does not significantly halt the illegal flows of foreigners through its territory", then indicated Trump in a statement released by the White House. The president has resorted to a law of 1977, the International emergency economic power act, which allows him to regulate trade directly during a national emergency. Trump declared the situation on the border with Mexico to be a national emergency also in order to have the necessary funds for the construction of the Wall bypassing the Congress.
The news on the new duties has shaken the markets already in the swing for the trade tensions between the USA and China. The Dow Jones collapsed in the Stock Exchange after hours while Tokyo opened for a fall. "Illegal immigration has a cost and US taxpayers are paying for what is happening at the border, which is already having a negative impact on the economy," said Trump's interim chief of staff, Mick Mulvaney.
Mexico has become the first US trading partner, replacing China, at loggerheads with Washington on the trade front. Both President Donald Trump and his Mexican counterpart, Andres Manuel Lopez Obrador have begun the process for the request for ratification, by the respective parliaments, of the new NAFTA, the Ssmca (the United States Mexico Canada Agreement). Trump also exempted Mexico and Canada from the duties on aluminum and steel. But this latest move marks a turnaround in relations between the two countries.
Obrador promised Central American migrants a work permit if they decided to stay in Mexico but his administration deported 45,000 illegal immigrants, with the peak of 15,000 reached last April against the 6,000 deportations last December when it took office, according to data from the National Institute for Immigration.
The Mexican reaction to the increase in duties was not long in coming. The undersecretary of North America, Jesús Seade, has argued that an effective introduction of a 5% duty on Mexican products imported into the United States would be disastrous and assured that Mexico would have to respond energetically. "This threat - he declared - turned into concrete action would be very serious and Mexico will not be watching, just as the ratification of the T-Mec is in progress", the Treaty between Mexico, the United States, and Canada.