Trump Imposes 5% Tariff on Mexican Imports

President Donald Trump says the U.S. will begin levying a 5% duty on imported goods from Mexico, beginning June 10.

The White House provided no immediate details, but apparently the tariff will apply to everything coming from Mexico, including vehicles and auto parts.

Trump, who announced the new tax via Twitter last night, says he will continue to raise the tax—perhaps to as much as 25% by Oct. 1—unless Mexico takes steps to halt illegal migrants from crossing its border into the U.S. He says he will remove the tariff when he believes the “illegal immigration problem is remedied.”

The news prompted a drop in overnight stock prices ranging from 2% to 7% for Asian carmakers with major assembly operations in Mexico.

Analysts say the new policy poses a threat to the updated North American Free Trade Agreement that Canada, Mexico and the U.S. signed last November.

None of the countries has ratified the pact, which would be called the U.S.-Mexico-Canada Agreement if approved. That has been because the U.S. continued to include Canada and Mexico in the import tariffs it began charging last May on imported steel and aluminum.

The U.S. finally agreed last week it would lift those taxes for the two countries, thereby clearing the way for ratification and implementation. Canada said earlier this week it has begun the ratification process. The White House did the same yesterday by filing an initial notice to Congress.