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Op-Ed: Trump to put five percent tariff on Mexican goods June 10

Tariffs on Mexico to start June 10

Trump announced a five percent tariff on all Mexican goods starting on June 10 and surging to 25 percent by October. The announcement is raising much concern as some major US companies have supply chains in Mexico and stand to lose billions if the tariffs go into effect.

Mexican officials warn of negative consequences

Trump has threatened to keep increasing the tariffs until all illegal immigration stops. Many doubt that Mexico can in practical terms ever achieve such a goal. Any hope that Trump could take the tariffs off any time soon because illegal immigration stopped is quite unlikely. Trump seems to suffer what might be called a tariff fetish a form of bullying a country to try and get his way.
As with his trade war with China, Trump is causing long term problems for the US economy while up to now it had been doing reasonably well. If this keeps up Trump may find it difficult to be re-elected for a second term even if the Democrats end up with a lackluster presidential candidate such as Joe Biden.

New Mexico governor says tariffs could be

A recent article notes: “New Mexico Gov. Michelle Lujan Grisham says President Donald Trump’s tariff on imports from Mexico has the “potential to be economically catastrophic” for the state. The Democratic governor said Friday the 5% tariff could threaten jobs for tens of thousands of people in the state and called on the president to retract his proposal. Lujan Grisham said the state sends around $1.5 billion in exports to Mexico each year and a trade war would devastate businesses all across New Mexico.”

US companies to suffer from the tariffs

The impact of the Mexican tariffs will fall immediately on US companies. Many US companies have set up tight supply chains with Mexican companies. Billions of dollars worth of auto parts go across the US border, with some going back and forth as components are added and integrated into finished vehicles. Similar supply lines exist for electronics and clothing. The tariffs will translate quickly into higher prices especially if they continue up to 25 percent.

John Mitchell president of IPC a trade group that represents that electronics industry said: “That’s what’s so concerning about these tariffs. It undercuts the region’s ability to leverage each other’s strengths to benefit North American manufacturing.”

A recent Digital Journal article reports that the Mexican president is confident that a trade agreement can be negotiated with Trump. It remains to be seen whether this is likely or false optimism.

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