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Trump to place tariffs on Mexico over migration

By WILLIAM HENNELLY in New York | chinadaily.com.cn | Updated: 2019-05-31 08:15
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US President Donald Trump speaks at the National Association of Realtors' Legislative Meetings & Trade Expo in Washington, US, May 17, 2019. [Photo/Agencies]

US President Donald Trump said in a statement on Thursday that "to address the emergency at the Southern Border", he would impose a 5 percent tariff on all goods imported from Mexico, effective June 10.

"I am invoking the authorities granted to me by the International Emergency Economic Powers Act," Trump said. "If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed," he said in the statement.

Trump said, however, that "if the crisis persists", the tariffs will be increased to 10 percent on July 1.

"Similarly, if Mexico still has not taken action to dramatically reduce or eliminate the number of illegal aliens crossing its territory into the United States, Tariffs will be increased to 15 percent on Aug 1, 2019, to 20 percent on Sept 1, 2019, and to 25 percent on Oct 1, 2019.

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

Trump said that "workers who come to our country through the legal admissions process, including those working on farms, ranches, and in other businesses, will be allowed easy passage".

The announcement took a toll on stock futures, as Dow futures were down 192 points at 8:10 pm, while S&P 500 futures fell 21 points. The Mexican peso was lower by about 2 percent.

Trucks wait to cross the border with the US in Ciudad Juarez, Mexico, April 9, 2019. [Photo/IC]

Mexico's deputy foreign minister for North America, Jesus Seade, said that it would be disastrous if Trump goes through with his threat to impose new tariffs on Mexico.

Investors' focus up to now had been on the US tariff escalation against China and the administration's moves to largely cut off Chinese tech giant Huawei Technologies Co Ltd from American business.

"We have confidence that Mexico can and will act swiftly to help the United States stop this long-term, dangerous, and deeply unfair problem. The United States has been very good to Mexico for many years," Trump said. "We are now asking that Mexico immediately do its fair share to stop the use of its territory as a conduit for illegal immigration into our country.

"At the same time, Mexico cannot allow hundreds of thousands of people to pour over its land and into our country — violating the sovereign territory of the United States.

Trump said he "will not stand by and allow our sovereignty to be eroded, our laws to be trampled, or our borders to be disrespected anymore".

Earlier Thursday, the Trump administration took a procedural action aimed at speeding up a vote in Congress on the new North American trade deal, but the move rankled House Speaker Nancy Pelosi, who has sought more time to review the pact.

US Trade Representative Robert Lighthizer submitted a draft statement of administrative action to congressional leaders, which allows the White House to submit the text of the agreement to Congress after 30 days for a vote.

Republicans, who control the US Senate, have been seeking a vote on the new US-Mexico-Canada Agreement (USMCA) before the August recess to avoid budget debates and 2020 presidential campaign activity expected to intensify in the autumn.

But legislative time is running short as Democrats, led by Pelosi, seek improvements in the trade deal's enforcement of new labor and environmental standards. Pelosi controls the schedule for trade legislation.

She said in a statement that submission of the draft at this time was "not a positive step". Pelosi added that her fellow Democrats had "been on a path to yes" on USMCA, but stronger enforcement provisions were needed for the pact.

US Vice-President Mike Pence said on Thursday in Ottawa that he was pushing to get Congress to ratify the USMCA this summer after both Canada and Mexico signaled they are ready to start the approval process.

Reuters contributed to this story.

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