Published: Fri, June 07, 2019
Markets | By Otis Pena

U.S. trade adviser says Mexico tariffs 'might not' go ahead

U.S. trade adviser says Mexico tariffs 'might not' go ahead

The first tariffs - 5% taxes on imports from Mexico - are to go into effect next Monday, and Trump has said that is "more likely" than not to occur despite stiff and vocal opposition from many fellow Republicans in Congress.

Markets expect central banks to chip in if trade tensions hurt global econnomy.

Bloomberg cited a US official as saying that it is still likely the tariffs will take effect - but if Mexico shows an effort to reduce migration, they could be removed.

Last fall, caravans of migrants from Central American countries began to move through Mexico toward the United States seeking asylum.

"If the Congress lets Trump get away with this, he will be free to slap tariffs on any country or any product at any time for whatever reason he dreams up", Edward Alden, a senior fellow at the Council on Foreign Relations, said in a blog post, adding that the president's decision to link trade to immigration and refugee concerns is an "especially risky escalation". Americans bought $378 billion worth of Mexican imports a year ago, led by cars and auto parts.

It remained unclear whether any deal could be struck with Trump out of the country. The U.S. government announced Wednesday that in May 144,000 migrants were detained at the border, up 32% from April.

US and Mexican officials are discussing the outlines of a deal that would dramatically increase Mexico's immigration enforcement efforts and give the United States far more latitude to deport Central Americans seeking asylum, according to a USA official and a Mexican official who cautioned that the accord is not finalized and that President Trump might not accept it.

"We're not done yet", Ebrard said.

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Mexican Foreign Secretary Marcelo Ebrard spent several hours at the State Department Thursday morning, while Trump's legal counsel and other Mexican aides met at the White House Thursday afternoon.

Administration officials have said Mexico can prevent the tariffs by securing its southern border with Guatemala, cracking down on criminal smuggling organizations and entering into a "safe third country agreement" that would make it hard for those who enter Mexico from other countries to claim asylum in the U.S.

Trump officials have told Mexico that is not enough, making it clear that the White House will only be satisfied with a return to the numbers tallied in the months after Trump was inaugurated, when arrests fell below 20,000, the lowest level in half a century.

Mexican Foreign Minister Marcelo Ebrard held meetings with US officials at the State Department, while other negotiators from both countries met at the White House.

Ebrard said he's optimistic about the talks continuing Thursday. "We have not yet reached an agreement but we continue to negotiate", he said. But the US has not proposed concrete metrics to assess whether Mexico is complying, and it is unclear whether even those steps would be enough to satisfy Trump on illegal immigration, a signature issue of his presidency and one that he sees as crucial to his 2020 re-election campaign.

Trump has threatened to impose tariffs if these negotiations fail. "If he enacts those tariffs, they're not going to be overridden".

Trump has gone after those who have criticized the tariff threat. Those people worry about the negative economic consequences for Americans and believe the tariffs - which would likely spark retaliatory taxes on USA exports - would also hurt the administration politically.

The threatened tariffs carry enormous economic implications for both countries, and politically they underscore a major ideological split between Trump and his party. "Commandeering U.S. trade policy to influence border security is an abuse of power".

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