How Trump's Mexico Tariffs Could Backfire and Increase Immig
President Donald Trump wants to slap tariffs on Mexico if it doesn#8217t slow migration to the United States, but experts on trade and Latin America warn that the measures could end up driving even more people to head north.
Frustrated by continued arrival of migrants fleeing poverty and violence in El Salvador, Guatemala and Honduras at the U.S. border, Trump said Tuesday that he would start imposing a 5% tariff on imports from Mexico, increasing to 25% in monthly increments through Oct. 1 if the country fails to take unspecified steps to halt the migration.
But the tariffs would probably push the already-stagnant Mexican economy into recession, sending a new wave of migrants north, as similar conditions did in the early 2000s, said Shannon O#8217Neil, a senior fellow for Latin America studies at the Council on Foreign Relations in New York.
#8220When Mexico#8217s economy weakens, Mexicans come north,#8221 she said.
The threat of tariffs has already underscored how closely the U.S. and Mexican economies are linked. Among U.S. manufacturers, Mexico becoming a favored destination for investments by American companies seeking to relocate their supply chains from China because of the mounting threat of an all-out trade war with the U.S.
Meantime, some 38% of Mexico#8217s gross domestic product comes from trade, and 80 percent of that is with the U.S., noted O#8217Neil.
There is little Mexico could do to meet Trump#8217s demands, she added, noting that the better-equipped U.S. has been unable to handle the current wave of immigrants. Last year, O#8217Neil said, Mexico was #8220barely able#8221 to process a quarter of some 30,000 applications for asylum it received last year, and twice that number are expected this year.
One possible response to Trump#8217s demand, a so-called Safe Third Party Agreement, would require Mexico to handle all the applications for asylum from Central Americans and guarantee their safety in Mexico mdash something it is unable to provide many of its own citizens as it struggles with record homicide and other crime rates.
That, O#8217Neil said, #8220would leave Mexico in an even bigger quandary#8221, so it is unlikely that Mexican President Andreacutes Manuel Loacutepez Obrador, would agree to such an agreement.
What#8217s more, she said, Lopez Obrador took some steps to deter and deport immigrants, including raiding hotels and other gathering places in southern Mexico, before Trump#8217s tariff threat, and it#8217s unclear what more he could do given Mexico#8217s lack of resources.
Trump#8217s tariff threat also has undermined the new trade agreement his administration has negotiated with Mexico and Canada, said Edward Alden, a senior fellow at the Council, and is a #8220qualitatively different#8221 encroachment on congressional authority than the President#8217s earlier imposition of tariffs on steel, aluminum and imports from China, which rest on a President#8217s authority over national security issues.