Trump Gambles US Economy With Incremental Mexico Tariffs

Mexico's President Andrés Manuel López Obrador

Enlarge Image Mexico's President Andrés Manuel López Obrador AP

Last week Trump threatened to put 5% tariffs on Mexican goods beginning on June 10, with gradual increases as high as 25% this year.

Pres. Donald Trump turned markets upside down when he announced a threat of imposing tariffs on all Mexican products coming to the United States starting next month.

Mexico has given few details on how it plans to stem the influx of migrants, though AMLO said on Saturday that his country is doing its part.

The United States imports $12 billion worth of Mexican wires, cables and conductors: about 50% of America's imports in the market. The Fed has raised rates four times since Mr. Trump named Jerome Powell chairman to keep a decade-long economic expansion from overheating and crashing the economy. President Donald Trump says he will impose the tariffs as a way to force the Mexican government to block mostly Central American migrants from crossing into the U.S. Mexico brought in 20 percent of total USA pork exports a year ago.

China has sought to increase its clout in the Pacific through increased foreign aid, which Australia has moved to undercut in recent months.

GOP Sen. John Kennedy of Louisiana, called the tariffs a "mistake" and said it was unlikely Trump would impose them.

"America has had enough!" he added. Mexico makes a FORTUNE from the USA, have for decades, they can easily fix this problem. Companies like Ford and General Motors have large parts of their supply chains based in Mexico, and the tariffs would negatively impact their operations.

Trump will be out of the country on an extended trip to Europe during the talks in Washington. They had jumped 53 per cent this year through Friday's close.

"We appeal to President Trump to reconsider plans to open a new trade dispute with Mexico", said Herring.

According to Citi calculations, Mexican GDP losses could range from 0.9% with a 5% tariff to a whopping 4.6% with a 25% tariff, while retaliation would mean a far more modest 0.04% to 0.4% less growth in US respectively.

Mexico has launched a counter-offensive against the threat of USA tariffs, saying the steps it has taken on immigration have kept hundreds of thousands of migrants from reaching the United States.

The the low-priced supply from Mexico makes the American goods they go into competitive. "American pork producers can not afford retaliatory tariffs from its largest export market which Mexico will surely implement", he says. Bloomberg describes the initial reaction from Mexican officials as "measured".

A last point to consider is that the political considerations ahead of 2020 presidential election would lead Trump the administration to take a harder stance on trade - such a strategy may backfire as Mexican demand is relevant for Republican border states.

A fifth of computer and electronic equipment imports come from Mexico, according to Goldman Sachs. The causes of Central American immigration are mainly related to lack of economic opportunity and rampant violence.

Mulvaney also said he did not want to see 25 percent tariffs imposed on Mexican imports.

The bulk of migrants are fleeing widespread violence and poverty in Guatemala, Honduras and El Salvador.

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