President Donald Trump, in a Twitter post May 30, said the United States would begin imposing tariffs on Mexican goods entering the country “until such time as illegal immigrants coming through Mexico, and into our country, STOP.”
The White House said in a statement that a 5% tariff on all goods imported from Mexico will begin on June 10.
“If the illegal immigration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the tariffs will be removed. If the crisis persists, however, the tariffs will be raised to 10% on July 1,” the White House said.
The figure could reach as high as 25% if Mexico fails to take action. “Tariffs will permanently remain at the 25% level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” Trump said.
The tariffs could hurt freight transportation companies since Mexico is one of the United States’ biggest trading partners. Supply chains could be adversely affected, especially ones like the automotive industry, which utilizes parts that cross borders often.
The auto industry imported $59.4 billion in parts from Mexico last year, according to U.S. government trade data. That includes parts used in factories and those sold in auto parts stores and repair shops.
It is estimated that a 25% tariff on all imports from Mexico would add about $28 billion a year to the cost of completed vehicles and parts.
At a press event in Mexico City on May 30 following the tweets, Jesus Seade, Mexico’s undersecretary of foreign relations for North America, told reporters that the country won’t retaliate before discussing the matter further with the United States.