Trump announces new tariffs on Mexico over immigration

President Trump on Thursday announced new tariffs on Mexico in an effort to pressure the country to halt the flow of migrants from Central America, a dramatic escalation of his hard-line border policy that could jeopardize a pending trade deal with Canada and Mexico.

Trump said in a pair of tweets that the U.S. will impose a 5 percent tariff beginning June 10 on all Mexican imports “until such time as illegal migrants coming through Mexico, and into our Country, STOP,” a goal that has never been achieved in recent history.

The tariff will increase by 5 percent each month until it reaches 25 percent “unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” the president said in an unusual, 1,004-word follow-up statement distributed by the White House.

Trump teased the announcement earlier Thursday, saying he would be making a “big league statement” that would include a “very dramatic” move regarding the U.S.-Mexico border. Trump last month threatened to slap tariffs on Mexico or close the border, but described his threat as a “one-year warning.”

The Trump administration has struggled to stem the tide of illegal migration, as crossings by migrants seeking asylum have approached levels not seen in more than a decade. More than 1,000 migrants were apprehended near a border crossing in El Paso, Texas on Wednesday in the largest single round-up on record, according to NBC News.

Trump has long accused the Mexican government of not doing enough to stop people coming from Guatemala, El Salvador and Honduras traveling to the U.S. to seek asylum.

But the move could also rattle financial markets at a precarious time for the president’s trade policy, as the administration is pressuring Congress to approve Trump’s revision of the North American Free Trade Agreement (NAFTA), the quarter-century-old pact with Canada and Mexico.

Dow futures plummeted more than 200 points on Thursday evening after the president announced the new tariffs.

White House officials defended the move as necessary to force Mexico to address what Trump has called a “crisis” at the border.

“Americans are paying for this right now. Illegal immigration comes at a cost. American taxpayers are paying for what’s going on at the border. This is already impacting the economy negatively,” acting chief of staff Mick Mulvaney told reporters.

The White House is implementing the tariffs under the 1977 International Emergency Economic Powers Act, which gives Trump authority to regulate commerce during a national emergency. The president invoked an emergency over illegal immigration earlier this year in order to circumvent Congress to build his long-promised border wall, a move that is being challenged in the courts.

The tariffs could have wide-ranging economic effects beyond Trump’s revised North American trade deal.

Mexico has emerged the U.S. biggest trading partner, having replaced China at the top spot amid Trump’s ongoing trade war with the world’s second-largest economy.

Importers who pay the tariffs often pass along the cost to consumers, so Americans could be hit by higher prices in the coming weeks and months.

White House officials were vague about what conditions Mexico would have to meet in order for the tariffs to be lifted.

Acting Homeland Security Secretary Kevin McAleenan said the administration wants Mexico to harden its southern border with Guatemala, crack down on human smugglers and work with the U.S. on new asylum provisions, all longstanding demands.

Muvlaney said progress would be judged on an “ad hoc basis” and would be monitored “day-by-day and week-to-week.”

Mexico reacted angrily to the announcement, with its top diplomat for North America, Undersecretary of Foreign Relations Carlos Seade, calling the announcement a “cold shower” and “very extreme” while threatening a response if tariffs are imposed, according to local newspaper El Financiero.

But Seade cautioned that tit-for-tat tariffs imposed by Mexico would signify a trade war.

The U.S.-Mexico trade relationship is at a critical stage, as both Trump and Mexican President Andrés Manuel López Obrador on Thursday formally began the process of ratifying the NAFTA revision in their respective legislatures.

And the announcement comes just weeks after Trump lifted steel and aluminum tariffs on Mexico and Canada, a move that was supposed to ease tensions with the U.S. neighbors in an effort to clear the way for the new trade deal.

Vice President Mike Pence said Thursday during trade summit in Ottawa, Canada that the deal would be approved this year.

“Our administration is working earnestly with leaders in the Congress of the United States to approve the USMCA this summer,” he said, using the administration’s acronym for the deal.

Asked by reporters about the new tariffs, Pence said Mexico and Congress both must do more to address the situation at the border.

“The president is absolutely determined to use the authorities he has as president to call on Congress, to call on Mexico, to do more to address this humanitarian crisis on our border,” he said.

But the move nonetheless marks a stark turn in U.S.-Mexico relations, which have historically compartmentalized security, migration and trade issues.

Mulvaney stressed the move exclusively applies to immigration policy, adding the tariffs are “not part of a trade matter.”

“The two are absolutely not linked," said Mulvaney. “This is an action we are taking to an immigration matter.”

Mexican Foreign Secretary Marcelo Ebrard is due to visit Washington in June, both to lobby for revised NAFTA with congressional leaders, and to meet with administration officials on other issues, including immigration and drugs.

Neither the Mexican Embassy in Washington nor Ebrard's office immediately returned a request for comment.

López Obrador's migration policy has been in flux since he took office in December, promising a humanitarian approach to Central American migrants.

Although López Obrador had promised to give all Central American migrants a work visa if they wished to stay in Mexico, deportations have shot up under his watch.

His administration has deported more than 45,000 people, hitting a clip of 15,000 a month in April, compared to the roughly 6,000 deported in December, when López Obrador took office, according to the country's National Migration Institute (INM).

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