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On May 30th, US President Donald Trump threatened to impose a 5% tariff on all goods being imported from Mexico.
The tariff would gradually be increased unless the “illegal immigration problem is remedied.”
On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,..
— Donald J. Trump (@realDonaldTrump) May 30, 2019
In another tweet he said that 90% of drugs into the US entered through Mexico and that it has killed thousands and ruined millions of lives.
90% of the Drugs coming into the United States come through Mexico & our Southern Border. 80,000 people died last year, 1,000,000 people ruined. This has gone on for many years & nothing has been done about it. We have a 100 Billion Dollar Trade Deficit with Mexico. It’s time!
— Donald J. Trump (@realDonaldTrump) May 31, 2019
The initial 5% tariff would be imposed on June 10th, 2019. If the illegal immigration problem persists, the tariff will be raised to 10% on July 1st, 2019.
“Similarly, if Mexico still has not taken action to dramatically reduce or eliminate the number of illegal aliens crossing its territory into the United States, Tariffs will be increased to 15 percent on August 1, 2019, to 20 percent on September 1, 2019, and to 25 percent on October 1, 2019. Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” the Presidential Statement read.
The White House further released a statement saying that Mexico has strong immigration laws, “much stronger than our own,” and that the time had come to enforce them.
Mexico has strong immigration laws—"actually much stronger than our own."
It's time to enforce them instead of passing the bill onto the United States.
The biggest stories we're reading today: https://t.co/xb9E3Be3a3 pic.twitter.com/gUBIWZvnOG
— The White House (@WhiteHouse) May 31, 2019
“We have confidence that Mexico can and will act swiftly to help the United States stop this long-term, dangerous, and deeply unfair problem. The United States has been very good to Mexico for many years. We are now asking that Mexico immediately do its fair share to stop the use of its territory as a conduit for illegal immigration into our country.”
On June 2nd, Trump said that Mexico was sending a delegation to discuss the situation, but that action was required, since “they’ve been “talking” for 25 years.”
Mexico is sending a big delegation to talk about the Border. Problem is, they’ve been “talking” for 25 years. We want action, not talk. They could solve the Border Crisis in one day if they so desired. Otherwise, our companies and jobs are coming back to the USA!
— Donald J. Trump (@realDonaldTrump) June 2, 2019
Mexico is Washington’s largest trading partner, sending across the border items like tomatoes, cars and rugs. Mexico sent the United States $346.5 billion of goods last year — meaning that a 5% tariff on those products would amount to a tax increase of more than $17 billion.
Mexican President Andrés Manuel López Obrador said that the issue needed to be solved through dialogue, but if that brings no solution, the Mexican government was prepared to seek help from international institutions.
El presidente @lopezobrador ha destacado: "Creemos en el diálogo y en la política, que es también negociación. No vamos a entrar a una guerra comercial, a una guerra de aranceles, de impuestos. No queremos esa confrontación con Estados Unidos, ni con ningún país.”
— Graciela Márquez Colín (@GMarquezColin) June 2, 2019
Mexican Economy Minister Graciela Marquez on June 1st, tweeted that she spoke to U.S. Commerce Secretary Wilbur Ross and that they would meet on June 3rd in Washington to discuss how to remedy the situation.
Conversé con el secretario de comercio de Estados Unidos, Wilbur Ross, durante la ceremonia de toma de protesta del presidente de El Salvador, Nayib Bukele. Continuaremos nuestro contacto en Washington, D.C. la próxima semana. pic.twitter.com/BLmjhjQ7Bt
— Graciela Márquez Colín (@GMarquezColin) June 1, 2019
Mexican Foreign Minister Marcelo Ebrard said that on June 1st, Mexican officials convened to discuss how to rectify the situation.
Elaborando los argumentos de México y la evaluación de impacto de las tarifas anunciadas en la economía. pic.twitter.com/JjLiHHXZQl
— Marcelo Ebrard C. (@m_ebrard) June 1, 2019
There will be a live press conference with both delegations from the US and Mexico in the early hours of June 3rd.
Separately, in a Presidential Proclamation US President Donald Trump announced that India would lose its special trade status as a developing country on June 5th, 2019.
“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.”
This is a follow up on Trump’s intent from March 4th, when he notified India and the US Congress that the designation would be lifted.
India will be removed from the preferential trade program, known as the Generalized System of Preferences, which gives developing countries easier access to the US market and lowers US duties on their exports. Turkey was also removed from the country earlier in 2019.
The tariffs will apply to “large residence” washing machines and solar cells and panels from India.
Another long-standing friction between the two countries involves cheaper generic drugs. India meets almost 40% of U.S. demand. Should Trump drive a hard line around poor quality and price fixing, the consequences for India’s economy could be serious.
In a statement, India’s government said it was “unfortunate” that the US did not accept India’s offer of a resolution.
“In any relationship, in particular in the area of economic ties, there are ongoing issues which get resolved mutually from time to time. We view this issue as a part of this regular process and will continue to build on our strong ties with the US, both economic and people-to-people,” the statement read.
The Indian Commerce Ministry said that “India as part of our bilateral trade discussions, had offered resolution on significant US requests in an effort to find a mutually acceptable way forward. It is unfortunate that this did not find acceptance by the US.”
India had offered a package to US, both before and after White House announced its decision on discontinuing of GSP status.
According to the Economic Times, “By targeting India, Trump isn’t opening another front in the trade war, after China and Mexico. He is sending a warning shot that the U.S. expects New Delhi to do more to prove it’s a Washington ally.”
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