Home 5 Ag Stories U.S., Mexico reach deal to avoid tariffs

U.S., Mexico reach deal to avoid tariffs

Wikimedia Commons

On May 30th, just as the Mexican legislative body was beginning to take up the United States – Mexico – Canada Agreement (USMCA) for ratification, President Trump tweeted out a plan to impose a new round of tariffs on our southern neighbors, which were supposed to go into effect this morning. The President cited his concerns over the flow of illegal migrants coming through Mexico, on their way to the United States. Illegal Immigration has long been a top priority to the administration, often a battleground with Democratic leadership.

Many feared this could be a destabilizing move in the efforts to get the USMCA ratified. Congressional members from both sides of the aisle voiced their concerns over the President’s tariff threats. Iowa Senators Chuck Grassley and Joni Ernst both said while border security and illegal immigration is an issue which needs to be addressed, it is a separate issue from trade and should be dealt with separately.

This tariff threat came just a few weeks after the President removed his Section 232 tariffs on Mexican and Canadian steel and aluminum. These tariffs were considered the biggest hurdle facing the deal’s passage in the U.S. Congress. The announcement of new tariffs seemed to be poised to negate any of that progress.

The only promising news was Mexican leadership vowed they would find a way to reach an agreement with the Trump administration to avoid the tariffs. It seemed like a long shot, but they beat those odds.

President Trump tweeted late Friday that he’d suspended plans to impose tariffs on Mexican goods, saying the U.S. and Mexico had reached an agreement on stemming illegal immigration. The president says Mexican officials “agreed to take strong measures” to cut down on the flow of illegal immigrants traveling through Mexico and entering the U.S.

The move puts to an end a threat that had sparked warnings from members of Trump’s party, as well as administration officials, about long-term damage to the economy. The damage would include driving up prices for consumers, as well as put the recently updated U.S.-Mexico-Canada Trade Agreement in jeopardy. U.S. and Mexican officials met for more than 10 hours on Friday and ended the third day of talks with an agreement that would satisfy Trump’s demand that Mexico cracks down on illegal immigration into the U.S.

Republicans in Congress had recently warned the president that they were ready to try and stop imposing tariffs on Mexico that were scheduled to begin on Monday. They were worried about driving up costs to consumers and the damage to the economy. The President has said if the Mexican government doesn’t approve the agreement, the tariffs will be put into place.