President Donald Trump announced in a pair of tweets on Thursday evening his intention to impose a 5 percent tariff on Mexico in hopes of compelling that nation to act on immigration within their own borders.
Trump’s tariffs on Mexico will be imposed starting on June 10, and would place a 5 percent tax on all imports to the United States “until such time as illegal migrants coming through Mexico, and into our Country, STOP,” he said. The tariff would also increase as time went by, the president suggested.
….at which time the Tariffs will be removed. Details from the White House to follow.
— Donald J. Trump (@realDonaldTrump) May 30, 2019
The plan by Trump didn’t have immediate effects on American markets as they had closed for the day, but stocks in foreign markets went down as a result of the policy announcement. Stock futures indicated that the Dow Jones was expected to lose at least 230 points due to the tariffs, with Nasdaq poised to lose 1.1 percentage points of its overall value, CNN reported.
One industry that could be hit hardest by the announced tariffs is the automotive industry, which has already seen troubling economic numbers before Trump tweeted out his intentions for the penalties against Mexican imports.
Earlier this month, before the tariffs were announced, Ford said it was cutting up to 10 percent of its workforce. General Motors also announced late last year that it was cutting 14,000 jobs, with Tesla planning to cut around 3,000 as well, Axios reported.
Mexico became the U.S.’s top overall trading partner in March of this year, and is the second-highest exporter of goods that comes into America, according to federal data.
A friendly reminder that tariffs are taxes on America consumers. https://t.co/SWRbcIWaVQ
— Charlie Sykes (@SykesCharlie) May 31, 2019
Due to the “supply chain” nature of the auto industry — in which companies that own entities in Mexico import goods from there to here — the tariffs could impose higher costs for automobile makers, which could, in theory, result in more jobs being lost.
The pain could be felt elsewhere, some economists warned.
“The risk of increased tariffs on global auto trade remains real and would be a significant drag on global GDP if it were to materialize,” Brian Foulton, chief economist at the ratings agency Fitch, said to Axios.