Credit...Cesar Rodriguez for The New York Times
After Months of Negotiations, Trump Imposes More Tariffs on Mexico
The tariffs are likely to inflame tensions with one of the largest U.S. trading partners.
by https://www.nytimes.com/by/alan-rappeport · NY TimesMexican officials have been negotiating for months in hopes of reaching a trade deal with Washington that would not devastate the country’s export-driven economy, but President Trump upended those talks on Saturday when he threatened to impose a 30 percent tariff on Mexican imports, potentially igniting a trade war with one of America’s largest trading partners.
In a letter to Mexico’s president, Claudia Sheinbaum, Mr. Trump said that Mexico was not doing enough to curb the flow of fentanyl into the United States and cited that as the reason for the tariffs. Mr. Trump added that Mexican companies were welcome to manufacture their products in the United States to avoid the tariffs.
The tariffs are set to take effect on Aug. 1 and are similar to the levies that the United States is imposing on imports from Canada and the European Union, which Mr. Trump said separately on Saturday would also face 30 percent duties. The tariffs come despite the fact that Mr. Trump brokered a trade deal with Mexico and Canada during his first term that was intended to stabilize economic relations between the United States and its neighbors.
Mr. Trump also warned Mexico not to retaliate with higher tariffs of its own. He said that whatever additional tariffs Mexico might impose would be added to the 30 percent rate he announced.
The president added that drugs were not the only issue of concern to the United States and pointed to other Mexican policies that contributed to “unsustainable” trade deficits.
“The Trade Deficit is a major threat to our Economy and, indeed, our National Security!” Mr. Trump wrote in the letter.
Mr. Trump has been going back and forth on tariffs on Mexico for months.
In March he announced plans to impose a 25 percent tariff on Mexican imports. Mexican officials warned that the import tax would cause food shortages in the United States and called it a “strategic mistake.”
Later, he exempted goods that trade under the United States-Mexico-Canada Agreement, the trade pact Trump negotiated in his first term. Currently, because of that U.S.M.C.A. exemption, about 87 percent of Mexican exports to the U.S. trade tariff free, according to data from the Mexican government.
A White House official who wasn’t authorized to speak publicly said Saturday that Mr. Trump’s new tariffs on Mexico would replace, rather than add to, the previous levies that the president imposed on the country, and that goods that trade under the United States-Mexico-Canada Agreement will likely be exempt.
The Mexican economy minister, Marcelo Ebrard, who is leading a Mexican delegation in Washington to discuss issues on border security, migration and trade, said U.S. officials told their Mexican counterparts that, “as part of the profound change in the United States’ trade policy,” the Trump administration was going to send letters to all world leaders announcing new tariffs.
“We mentioned at the negotiating table that it was an unjust move and that we did not agree with it,” Mr. Ebrard said in a statement posted on social media on Saturday.
Mexican officials said that they would work to ensure that, before the new tariffs take effect on Aug. 1, “we have an alternative that allows us to protect businesses and jobs on both sides of the border.”
Emiliano Rodríguez Mega and Ana Swanson contributed reporting.
More on Trump’s Tariffs
- U.S.-Brazil Trade War: Right-wing Brazilians wanted sanctions against the judge prosecuting Jair Bolsonaro, the country’s former president. President Trump opted for tariffs. The move shows how Trump is using tariffs to settle scores against his political enemies and has raised new legal questions about the president’s powers over trade.
- Goods From E.U. and Mexico: Trump announced in letters posted to social media that he would place a 30 percent tariff on goods from the European Union and Mexico, upending months of careful negotiations.
- Negotiations With Canada: Canada’s new prime minister, Mark Carney, has been called the “Trump whisperer,” and negotiations have been cordial and professional. But it’s been a wild ride, including a threat to impose a 35 percent tariff on Canadian imports that upended negotiations.
- Tariffs on Kazakhstan: The Central Asian nation, rich in critical minerals, is deepening its ties to China but does relatively little trade with the United States. The Trump administration’s aggressive approach — including a warning letter to strike a deal by Aug. 1 or face a 25 percent tariff — is a bit of a turnabout for the country.
- Influence in Asia: Secretary of State Marco Rubio wants to bolster ties with the continent to counter Beijing’s power, but Trump’s tariff threats have nations asking why they should align with Washington.
- Policy or Cudgel?: In 2005, the economist Pietra Rivoli followed the production of a T-shirt from a cotton farm to a Walgreens to understand global trade. Today, she sees a new system arising.
- Surviving Trump’s Trade War: Eagle Creek’s experience underscores how Trump’s chaotic approach to tariffs is having a real impact, even before the toughest levies take effect.