On May 30, 2019, President Trump announced the United States will impose a 5% tariff on all goods from Mexico unless it stopped the flow of illegal immigration to U.S. The tariff will gradually increase from 5% up to 25%. On June 10, a 5% tariff will be imposed. On July 1, the tariff will increase to 10% and then an additional 5% on the first day of each month for three months. The tariffs would stay at 25% “until Mexico substantially stops the illegal inflow of aliens coming through its territory.”

Trump said he imposed the tariffs under the International Emergency Economic Powers Act (IEEPA), which grants the president sweeping authority to regulate commercial activity in the event of a crisis.

Only two weeks ago, Trump lifted 232 tariffs on Canadian and Mexican steel and aluminum. The removal of those tariffs was crucial in getting Mexico and Canada to move ahead toward passage in their legislatures. Only hours earlier, Mexico’s president said he was calling back the Mexican Senate, already in recess until September, for a special session this summer to consider passing USMCA. However, these new tariffs could cool off the progress that’s been made.

During a news conference Thursday evening, Mexican President Andrés Manuel López Obrador says his foreign relations secretary will lead a delegation to Washington on Friday to seek an agreement that benefits both nations.

Mallory Alexander will continue to monitor this situation and keep you updated as more information is made available. Please contact your Account Representative if you have any further questions.

Source: REUTERS