The Trump administration has announced its intention to impose new tariffs against Mexico starting at 5 percent on June 10th and gradually rising to 25 percent by October 1st.
These new tariffs will undermine the progress made toward passage of the United States-Mexico-Canada Trade Agreement (USMCA) and undercut the recent positive news that Section 232 steel and aluminum tariffs on Mexico and Canada were being lifted.
These new tariffs will increase the price of top imports from Mexico, including cars, TVs, cell phones, medical instruments, and fresh produce.
On CNBC’s Squawk on the Street this morning, Americans for Tax Reform President Grover Norquist told host Rick Santelli that the new tariffs are harmful to American consumers:
“Tariffs are taxes,” Norquist said. “They are taxes on American consumers and American producers who use imported products. We need to get those tariffs down as quickly as we can. I understand the President’s using tariffs to try and get other countries to be more free trade. The sooner we can come to an agreement, the more certainty we have. And we can get those taxes off the American consumer.”
Trade is vital for America’s economy and employment – with more than 20 percent, or 41 million jobs in the U.S. directly tied to trade.
While Trump is right to fight for secure borders, these new tariffs risk undercutting all the good his administration has achieved for the economy thus far, such as the Tax Cuts and Jobs Act.
These new tariffs also threaten to undermine passage of the USMCA, which updates NAFTA to include new automotive rules, new protections for intellectual property rights, and modernizing agricultural trade to benefit American farmers. A recent report shows that the USMCA would raise U.S. real GDP by $68.2 billion and create approximately 176,000 jobs. As Mexico moves toward ratification of the agreement, these new tariffs could torpedo the Trump trade deal.
If the Administration follows through on its threat to impose new tariffs, it would wipe out future economic growth and obliterate a generational chance for an updated NAFTA agreement.