Trump: US to impose five percent tariff on all Mexican goods

US president says the tariff is in response to a 'mass incursion' of migrants from Mexico.

    US President Donald Trump says he will impose a five percent tariff on all Mexican goods entering the US unless Mexico stops migrants trying to enter the US illegally [Jim Watson/AFP]
    US President Donald Trump says he will impose a five percent tariff on all Mexican goods entering the US unless Mexico stops migrants trying to enter the US illegally [Jim Watson/AFP]

    US President Donald Trump said on Thursday he would impose a tariff on all goods arriving from Mexico in response to what he called a "mass incursion" of migrants entering the country "illegally".

    Trump said the tariff would start at five percent on June 10 but then rise in stages every month to 25 percent on October 1 and remain at that level unless Mexico stops migrants from crossing the US's southern border.

    "As everyone knows, the United States of America has been invaded by hundreds of thousands of people coming through Mexico and entering our country illegally. This sustained influx of illegal aliens has profound consequences on every aspect of our national life," Trump said in a statement. "Mexico's passive cooperation in allowing this mass incursion constitutes an emergency."

    "If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the tariffs will be removed," he added.

    Al Jazeera's Heidi Zhou-Castro in Washington, DC, says the tariffs would be very significant if they were implemented.

    "It would go from just painful to catastrophic, the economic impact, on both sides of the border if this threat is realised through October, at which point that five percent tariff would jump to 25 percent on all Mexican goods," she said.

    Mexico is the US' third-biggest goods trading partner. The US imported $346.5bn worth of goods from Mexico last year - about half of those were vehicles and machinery. US exports to Mexico amounted to $265bn.

    Migrants from Honduras, part of a caravan of thousands from Central America trying to reach the United States, stand next to the border fence as they prepare to cross it illegally, in Tijuana
    Thousands of people from Latin America flee violence and poverty every year and head to the US [Mohammed Salem/Reuters]

    Mexico's deputy foreign minister for North America, Jesus Seade, said on Thursday that it would be disastrous if Trump went through with his threat to impose the tariffs. 

    And Mexican President Andres Lopez Obrador sent a letter to Trump saying he did not want "confrontation" and called for dialogue with the US on migration.

    Al Jazeera's Manuel Rapalo, reporting from Mexico City, says the reaction there to Trump's proposal has been measured.

    "The Mexican government has departed from its own policy to provide more assistance under the new Mexican administration to central American migrants. They've increased detentions at Mexico's southern border with Guatemala, they've been enforcing US policy accepting central American asylum seekers," said Rapalo.

    Meanwhile, the Trump administration has been pushing for passage of the United States-Mexico-Canada Agreement that would update the North American Free Trade Agreement (NAFTA).

    The updated deal includes stricter rules on the export of duty-free cars and milk products to the US. It also forces Mexico to strengthen workers' rights.

    Trump had long criticised NAFTA, saying it had a negative effect on the US labour market, and made the renegotiation of the deal a cornerstone of his campaign and first year in office. Mexico's Seade said he expected the three countries to have ratified the replacement deal before August. In Mexico, the agreement only needs to ratified by the upper chamber of parliament, which handles international treaties.

    Earlier this month, the US agreed to lift tariffs imposed last year on Canadian and Mexican steel and aluminium imports, a move that was meant to help pave the way to the ratification.

    SOURCE: Al Jazeera and news agencies