Trump's Mexico Tariff Threat Could Affect Entire US - Report

Mexico's Agriculture Minister Victor Villalobos said the proposed duties would cause total economic damage to the agriculture sector of $117 million per month in both countries, according to Reuters. Villalobos did not specify, however, at what level of tariffs this damage would occur, Reuters reported.

Moreover, the Mexican ministries of foreign affairs, economy and agriculture warned in a joint statement published on Monday that Washington’s extra tariffs on Mexican goods would only increase the inflow of migrants to the United States.

"Without the big efforts Mexico has made regarding migration, the United States would receive 500,000 more migrants in 2019 alone. If, regrettably, tariffs were in fact imposed, migration would increase even more and both economies would become less competitive abroad and less prosperous at home", the statement said.

The statement also noted that Mexico was committed to a dialogue to "avoid a costly and unnecessary confrontation, while at the same time analyzing potential retaliatory measures to the tariffs".

Last week, Trump announced that a 5 per cent import tax would be imposed on all Mexican goods starting 10 June until Mexico stops illegal migrants coming through its territory. The duty will increase by 5 per cent every month until it reaches 25 per cent.

White House Adviser Kellyanne Conway has said that Trump's plan to impose new tariffs on Mexico will not jeopardize the US-Mexico-Canada-Agreement (USMCA).

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The US Chamber of Commerce has warned, however, that the tariffs could result in a $17 billion tax increase on American businesses and consumers. The US states of Texas, Michigan and California would be reportedly the three hardest hit should the tariffs take effect.

An increasing number of migrants from Central America have been reportedly arriving at the US border with Mexico in recent months. Trump called the surge of arrivals a crisis and declared a national emergency in February to secure funds to build a border wall.

The construction of the wall on the US-Mexican border to prevent the influx of undocumented migrants and drug trafficking has been one of Trump's main campaign pledges. The US president, however, has been struggling to find financing for the wall since Congress refused to reallocate billions of dollars from the budget at Trump's request.