President Trump shocked observers last week when he announced broad new tariffs on Mexican exports to the United States. The proposed tariff will start at 5% on June 10 and will continue to increase incrementally to a maximum of 25%, remaining in place until such time as “the illegal immigration problem is remedied.” If no action is taken by the Mexican authorities, the across-the-board tariffs will hit 25% in October.
Some of Trump’s own staff were among those being taken by surprise, including US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, both of whom are still trying to ensure the safe passage of the Trump administration’s new North American trade pact.
The tariff announcement comes amid a recent influx of Central American migrants at the US-Mexico border. And though the intrinsic power disparity would seem to imply that President Trump is holding all the cards in this latest fight, a prolonged trade war would serve to undercut economic health on both sides of the border.