Donald Trump’s border war against Mexico has been slammed by American manufacturers who warn that slapping tariffs on the southern neighbour will force consumers to pay more.
The day after a record group of more than 1000 illegal migrants was caught in Texas, Mr Trump threatened a five per cent tariff on Mexico from June 10 unless the country stopped people “invading” the US.
Mexico President Andres Manuel Lopez Obrador hit back, saying his country would not be provoked and social problems were not solved with “coercive measures”. He ordered his foreign minister to Washington to try to negotiate a solution.
Mexico’s foreign minister Marcelo Ebrard also tweeted that the treatment of Mexico was “unfair” and “did not make economic sense”.
“Mexico is the main trading partner in the United States. What they receive from our country are essential goods and services, productivity,” Mr Ebrard tweeted.
“The migratory flow of Central America and other countries or the high consumption of narcotics is not the responsibility of Mexico.”
US border officials apprehended nearly 400,000 people from Mexico at the country’s south-west border in 2018, with many claiming to be escaping poverty and violence in Central American nations.
The National Retail Federation said the tariffs on Mexican exports would push up the price of produce such as avocados and tomatoes, auto parts and clothes.
US retailers imported $US128 billion ($184 billion) in goods from Mexico in 2017 but the US also sold just shy of $US300 billion ($432 billion) in goods to Mexico in 2018, CNN reports.
Despite the pushback from US business and Mexico, Mr Trump has doubled down on his threat.
He vowed to increase the tariffs by five percentage points each month until October to 25 per cent unless the migration problem was remedied.
“Mexico has taken advantage of the United States for decades,” Mr Trump said in a tweet.
In another, Mr Trump linked the need for tariff threats to the problem of drug trafficking, tweeting:
“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!”
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 US business community has warned that “forcing Americans to pay more” would not solve illegal immigration issues.
US Chamber of Commerce executive vice president Neil Bradley said imposing tariffs on goods from Mexico was “exactly the wrong move”.
“These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border. Instead, Congress and the president need to work together to address the serious problems at the border,” Mr Bradley said.
Mr Trump’s fight with Mexico comes after the US increased tariffs on $200billion ($288 billion) of goods from China from 10 per cent to 25 per cent, with China’s retaliatory tariffs now coming into effect.
Mexico has stepped up raids on migrant caravans travelling through the southern states of Chiapas and Oaxaca this year.
It has deported thousands of migrants and frustrated thousands more who wait endlessly for permits that would allow them to travel legally through Mexico.
US administration officials said Mexico could prevent the tariffs from kicking in by securing its southern border with Guatemala, cracking down on criminal smuggling organisations, and entering into a “safe third country agreement” that would make it difficult for those who enter Mexico from other countries to claim asylum in the US.
“We fully believe they have the ability to stop people coming in from their southern border and if they’re able to do that, these tariffs will either not go into place or will be removed after they go into place,” acting White House chief of staff Mick Mulvaney said.
The stock market’s tumble on Friday all but guarantees that May will be the first monthly loss for the market in 2019. The news hit automakers particularly hard. Many of them import vehicles into the US from Mexico.