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Mexico Tariffs, Trump’s ongoing Dilemma


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A tale of tariffs

United States President Donald J. Trump spoke recently about a plan to impose increased tariffs on Mexican imports if the Mexican government did not do more to address Mexico/U.S border issues. He threatened to start with a 5% tariff on Mexican imports, and then raise it every month until he was satisfied that the Mexican government was taking meaningful action to curb illegal immigration.

While tariffs on Mexican imports would certainly hurt the Mexican economy, they also have the potential to severely damage certain sectors of the U.S. economy, which is inextricably linked with Mexico’s economy and has benefited from free trade agreements for decades. In fact, Senate Majority Leader Mitch McConnell suggested that the U.S. Senate would need to block Trump’s plan to impose tariffs on Mexico if that plan ever appeared before Congress.  

An expected turn of events

Ultimately, president Trump dropped his talk of tariffs and accepted the terms of a deal that former Homeland Security Secretary Kristen Nielsen had negotiated with Mexico in December. Nielsen’s deal includes stepped up security on the Mexican side of the border and tougher terms for asylum seekers.

“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico,” Trump tweeted. “The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended.” CNN

The relationship between Mexico and the United States remains strong, the economies of the two countries are deeply intertwined, and business realities are strongly likely to outlast current political realities.

 

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