Politicians, businesses and others are scrambling to deal with the possible fallout from President Trump’s declared intent to impose new tariffs on Mexico – or to head it off.
On May 30, Trump tweeted that the U.S would impose progressive tariffs on all imports from Mexico, starting at 5% on June 10 and reaching 25% by Oct. 1, “until such time as illegal migrants coming through Mexico, and into our Country, STOP.” Trump apparently wants Mexico to prevent Central American families from trekking through and requesting asylum in the U.S.
Reaction was immediate, with food processors and retailers warning that both the tariffs and almost certain retaliation by Mexico could hit American businesses and consumers hard. The U.S. Chamber of Commerce called the new tariffs “exactly the wrong move” and threatened to bring suit against the administration to stop them.
Mexico is the primary source of almost a dozen kinds of fresh produce sold in the U.S., supplying 99% of strawberries and 80% of tomatoes. Any new duty would add to an existing 17.5% tariff on Mexican tomatoes that was implemented early last month, after an existing agreement failed to be renewed.
An additional concern is that a new trade tiff with Mexico would torpedo the U.S.-Mexico-Canada Agreement (USMCA), a replacement for the North America Free Trade Agreement that the administration is trying to get through Congress this summer.
Senate Republicans are showing signs of balking at the new tariffs. “This is a misuse of presidential tariff authority and counter to congressional intent,” Sen. Chuck Grassley (R-Iowa), chairman of the Senate Finance Committee, told the Wall Street Journal. Republican senators have been discussing a vote deauthorizing the president from using his emergency powers to impose a new tariff on Mexico – although it would face an almost certain veto.