The nation’s leading business trade associations warned that President’s Trump’s decision to slap tariffs on Mexico to force it to halt mass immigration into the United States could backfire and undermine a key policy goal of the administration: passage of the U.S.–Mexico–Canada Agreement on trade. Just hours before Trump’s announcement Thursday, Mexican President Andrés Manuel López Obrador brought the USMCA before his legislature for ratification.
National Association of Manufacturers President Jay Timmons said the tariffs would have “devastating” consequences for his group’s members. “Manufacturers have been working hard to secure passage of the U.S.-Mexico-Canada Agreement and the last thing we want to do is put that landmark deal — and the two million manufacturing jobs that depend on North American trade — in jeopardy,” Timmons warned.
On Friday, López Obrador vowed his country would “overcome” Trump’s tariffs, which begin June 10. “They will make rectifications because the Mexican people don’t deserve to be treated in the way being attempted,” he said. The Mexican president, a leftist who has clashed with Trump, has not specifically said that the USMCA would be blocked, however. Canada’s foreign minister, Chrystia Freeland, her country’s top negotiator on USMCA, told Canadian lawmakers he informed her that Mexico would move ahead with ratification.
Mexican ratification of USMCA had already been delayed for months by a dispute between with the White House over U.S. tariffs of 25% on steel and 10% on aluminum. Mexico had initially been exempted from the tariffs, but the White House removed the exemption last year as a pressure tactic during the USMCA negotiations. The two countries reached a deal on USMCA in November, but the White House resisted restoring the exemptions, prompting Mexico to hold off on ratifying the agreement.
The White House agreed to restore the exemptions earlier this month, but on Thursday the president said he would place a 5% tariff on all Mexican goods, increasing 5% every month until the “illegal immigration problem is remedied.”
That move may have robbed USMCA of momentum, warned David French, the National Retail Federation’s senior vice president for government relations. “Forcing Americans to pay more for produce, electronics, auto parts, and clothes isn’t the answer to the nation’s immigration challenges, and this certainly won’t help move USMCA forward.”
It defeats the purpose of having a free-trade deal if the administration creates a situation that causes its trade partner to enact tariffs anyway, said Consumer Technology Association President Gary Shapiro. “The administration made important progress yesterday by alerting Congress that the new NAFTA [USMCA] may come soon — but almost immediately backslid by slapping tariffs on Mexico, a valuable neighbor.” U.S. companies export $41 billion worth of consumer technology to Mexico, nearly twice as much as the next-largest market, he noted.
Trump nevertheless stood firm on the Mexican tariffs Friday, tweeting, “In order not to pay Tariffs, if they start rising, companies will leave Mexico, which has taken 30% of our Auto Industry, and come back home to the USA. Mexico must take back their country from the drug lords and cartels. The Tariff is about stopping drugs as well as illegals!”
