GZERO Media logo

Trump Vows Mexico Tariffs: Who would they Hit, and Why?

Trump Vows Mexico Tariffs: Who would they Hit, and Why?

President Donald Trump tweeted yesterday that, beginning on June 10, the United States would impose a 5 percent tariff on all goods entering the US from Mexico "until such time as illegal migrants coming through Mexico, and into our Country, STOP." He added that the tariff rate would steadily rise "until the illegal immigration problem is remedied."

A few thoughts:

This will affect lots of things that Americans buy: Mexico recently became the US' largest trade partner (in part because of the US-China trade spat). If these tariffs move forward, Americans looking to buy cars, electronics, and the makings of a fresh salad will pay more. Note: tomato-lovers and avocados-aficionados are particularly exposed.

Mexico can retaliate, a bit. Mexico's economy is much smaller than its northern neighbor's, so it has less leverage. But it can still target American exporters of meat, cheese, potatoes, cranberries, bourbon and speedboats (speedboats!) with retaliatory tariffs that could cripple their sales in Mexico, a major market. Mexico has done this once before, in response to Trump's metals tariffs last year.

The USMCA trade agreement, also known as NAFTA 2.0, is in serious jeopardy. The agreement has not been ratified in either the US or Mexico. US Democrats, led by House Speaker Nancy Pelosi, object to parts of the agreement and have delayed a vote. Trump appears to be preparing to force that vote anyway. If it comes, the treaty may well be rejected.

Will it work? Trump has made the fight against illegal immigration the heart of his political message since he first launched his presidential campaign. Turning the screws on Mexico over this issue plays well with his base as he heads into 2020. But a total "STOP" to undocumented migrant flows is virtually impossible, so what specifically does he want from Mexico now? Mexican President Andres Manuel Lopez Obrador has dispatched an envoy to Washington to find out.

Could it backfire? These tariffs would certainly hurt the Mexican economy far more than the US economy. But if Mexico's economy sinks, more people will want to leave Mexico, meaning more pressure at the US-Mexican border. And a crippled economy will leave the Mexican government with less money to address precisely the border problems that Trump says he wants solved.

Bottom line: The world is again reacting to a tweet, and Trump could just as easily reverse this plan. If not, these tariffs will have serious implications for Latin America's second-largest economy, for American consumers, and for US politics ahead of the presidential election.

Keep your eye on the timeline.

Carbon has a bad rep, but did you know it's a building block of life? As atoms evolved, carbon trapped in CO2 was freed, giving way to the creation of complex molecules that use photosynthesis to convert carbon to food. Soon after, plants, herbivores, and carnivores began populating the earth and the cycle of life began.

Learn more about how carbon created life on Earth in the second episode of Eni's Story of CO2 series.

As we enter the homestretch of the US presidential election — which is set to be the most contentious, and possibly contested, in generations — Americans are also voting on 35 seats up for grabs in a battle for the control of the Senate. The 100-member body is currently held 53-47 by the Republican Party, but many individual races are wide open, and the Democrats are confident they can flip the upper chamber of Congress.

Either way, the result will have a profound impact not only on domestic policy, but also on US foreign relations and other issues with global reach. Here are a few areas where what US senators decide reverberates well beyond American shores.

More Show less

On September 23, GZERO Media — in partnership with Microsoft and Eurasia Group — gathered global experts to discuss global recovery from the coronavirus pandemic in a livestream panel. Our panel for the discussion Crisis Response & Recovery: Reimagining while Rebuilding, included:

  • Brad Smith, President, Microsoft
  • Ian Bremmer, President and Founder, Eurasia Group & GZERO Media
  • Jeh Johnson, Partner, Paul, Weiss, Rifkind, Wharton & Garrison, LLP and former Secretary of Homeland Security.
  • John Frank, Vice President, UN Affairs at Microsoft
  • Susan Glasser, staff writer and Washington columnist, The New Yorker (moderator)

Special appearances by UN Secretary-General António Guterres, European Central Bank chief Christine Lagarde, and comedian/host Trevor Noah.

More Show less

Jon Lieber, who leads Eurasia Group's coverage of political and policy developments in Washington, offers insights on the Supreme Court vacancy:

Will Senate Republicans, who stopped a Supreme Court nomination in 2016, because it was too close to an election, pay a political price for the change in tactics this time around?

Not only do I think they won't pay a political price, I think in many cases, they're going to benefit. Changing the balance of power on the Supreme Court has been a career-long quest for many conservatives and many Republicans. And that's why you've seen so many of them fall in line behind the President's nomination before we even know who it is.

At this point, do Senate Democrats have any hope of stopping President Trump from filling the ninth seat on the Supreme Court?

More Show less

In a special GZERO Media livestream on global response and recovery amid the COVID-19 pandemic, Eurasia Group & GZERO Media president Ian Bremmer discussed the difference between Europe's unified approach to economic stimulus and the deeply divided and political nature of the current conversation in the US. While initial stimulus support was bipartisan, there is little chance of Democrats and Republicans coming together again ahead of the November 3 presidential election. "It's red state versus blue state. President Trump's saying that coronavirus isn't so bad if you take the blue states out. He's president of the blue states, you can't take the blue states out," Bremmer told moderator Susan Glasser of The New Yorker.

UNGA banner

GZEROMEDIA

Subscribe to GZERO Media's Newsletter: Signal

Panel: How will the world recover from COVID-19?

UNGA Livestream