News World Donald Trump’s tariff threats an example of “hostage-taking”

Donald Trump’s tariff threats an example of “hostage-taking”

Donald Trump's use of tariff threats to get his way with countries like Mexico has been branded "hostage-taking". Photo: Getty
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Donald Trump’s migration deal with Mexico is an example of “hostage-taking”, a former World Trade Organisation chief says.

Mr Trump threatened high tariffs on the southern neighbour from Monday unless the Mexican government stopped the flow of illegal migrants into America.

In response, Mexico agreed to expand a contentious asylum program and deploy security forces to stem the flow of illegal immigration from Central America.

Former WTO director-general Pascal Lamy said Mr Trump’s actions did not accord with the spirit of international diplomacy.

“My reaction is it seems that hostage-taking works. That’s my reaction,” Mr Lamy told Reuters in a telephone interview.

“If there’s a rule of law, it’s because people believe it’s better than the law of the jungle. And many people don’t like the law of the jungle because some are strong, some are weak, and they don’t want the strong to always step on the weak.”

The White House did not immediately respond to requests for comment on the remarks by Mr Lamy, who has criticised the American president’s use of tariffs in the past.

Mr Trump announced a deal on Friday after three days of Mexico-US negotiations in Washington.

“The Tariffs scheduled to be implemented by the US on Monday, against Mexico, are hereby indefinitely suspended,” Mr Trump said on Twitter on Friday evening.

“Mexico, in turn, has agreed to take strong measures to stem the tide of Migration through Mexico, and to our Southern Border. This is being done to greatly reduce, or eliminate, Illegal Immigration coming from Mexico and into the United States.”

US border officers apprehended more than 132,000 people crossing from Mexico in May, the highest monthly level since 2006.

Mr Trump, who has railed against what he described as an “invasion,” had threatened to impose levies rising to 25% unless Mexico addressed the problem.

Mexico made concessions during the talks, offering to send 6,000 troops to its southern border with Guatemala, but has said it wants to see a long-term solution that would involve economic development aid.

Mexico had prepared a list of possible retaliatory tariffs targeting products from agricultural and industrial states regarded as Mr Trump’s electoral base, a tactic China has also used with an eye toward the Republican president’s 2020 re-election bid.

Imposing tariffs on Mexico would have left the United States fighting trade wars with two of its three largest trading partners and would further unnerve financial markets already on edge about a global economic slowdown.

The United States slapped tariffs of up to 25% on $200 billion in Chinese imports last month, prompting Beijing to levy its own tariffs on $60 billion in American goods.

Mr Trump said on Thursday he would decide later this month whether to hit Beijing with tariffs on an additional list of $300 billion in Chinese goods.

Economists say two trade disputes could damage supply lines and pinch consumers at a time when the global economic expansion that followed the 2008 financial crisis has started to sour and the risk of recession has risen.

Even the United States, one of the more solid performers on the economic stage, would not be immune to the downdraft.

The US Labor Department reported on Friday that job growth slowed sharply in May and wages rose less than expected, raising fears that a loss of momentum in economic activity could be spreading to the labour market.

US business groups were generally opposed to the tariffs, warning they would raise costs for companies and lead to higher prices for American consumers. Trump’s fellow Republicans were also not keen on the prospect of a two-front trade war.