US President Donald Trump has announced a 5% tariff on all goods imported from Mexico, in a move designed to pressure the Mexican government to curb illegal immigration across the southern border. The tariff is due to take effect on 10 June and will rise gradually to 25% until the immigration problem is resolved, Mr Trump said in a tweet.
The surprise announcement rattled financial markets, with the Mexican peso, US stock index futures and Asian stock markets all falling. Shares in Japanese carmakers that export from Mexico to the US were among those affected. Mexico is now the largest US trading partner for goods, a status it gained as a result of the Trump administration's trade war with China.
In a two-page letter, Mexico's president, Andrés Manuel López Obrador, responded sharply, writing: "The Statue of Liberty is not an empty symbol … With all due respect, even though you have the right to say it, 'make America great again' is a fallacy because, until the end of times, and beyond national borders, universal justice and fraternity should prevail." He added: "President Trump, social problems aren't resolved with taxes or coercive measures."
The White House said Mr Trump would use the International Emergency Economic Powers Act to implement the tariffs, and that they would be removed if the migration crisis was alleviated through effective actions taken by Mexico, at the sole discretion of the US. The announcement comes as the administration seeks congressional approval for the US-Mexico-Canada Agreement, though the White House chief of staff, Mick Mulvaney, insisted the two matters were "absolutely not linked".
The US Border Patrol is reportedly holding 80,000 people in custody, with an average of 4,500 migrants, mostly from Central America, arriving daily. The measures are bound to trigger retaliation that would hit Trump-supporting farming and industrial states. Rufus Yerxa, president of the National Foreign Trade Council, called the move "a colossal blunder". China's foreign ministry expressed sympathy for Mexico, with spokesman Geng Shuang saying that "the United States has repeatedly taken trade bullying action. China is not the only victim."
