President Trump last night announced that his administration would impose a 5% tariff on all Mexican goods starting on June 10. The measure was announced as part of a strategy to force Mexico to do more to stem the flood of illegal immigrants coming across the southern border with Mexico.
President Trump will raise the tariff every month, with a 25% cap being reached in October, until Mexico is able to stop the flow of migrants through their country.
The news has already caused the U.S. dollar to surge 2.5% against Mexico’s peso, and has rattled companies with investments in Mexico.
The Mexican government appears to be panicking as well. Reuters reported late Thursday evening that Mexican President Andres Manuel Lopez Obrador will be sending a trade delegation to Washington, DC.
JUST IN: Mexico’s President Lopez Obrador asks Trump to have U.S. officials meet with the Mexican foreign minister in Washington on Friday to seek a solution that benefits both nations https://t.co/FqaPR9apcm pic.twitter.com/onyEIhklic
— Reuters Top News (@Reuters) May 31, 2019
Mexico’s delegation will be led by Foreign Minister Marcelo Ebrard.
President Lopez Obrador also released a letter online saying that he wished to avoid confrontation and hoped the two sides could come to a speedy resolution to this latest disagreement. In that same letter, however, Lopez Obrador called President Trump’s America first policy a “fallacy.” Lopez Obrador also insisted that President Trump was turning the United States into a “ghetto” that stigmatizes and mistreats migrants.
Mexico has also suggested that it could retaliate in the same manner against US products.
I wouldn’t be betting on Mexico coming out ahead in any trade war with President Trump, though.