Trump Suspends Mexico Tariff Threat

On Friday night, President Donald Trump withdrew his widely opposed threat to impose a 5% tariff on all goods from Mexico that was to take effect today.

The tariffs were to increase in five-point increments each month to a cap of 25% by October on some $378 billion worth of Mexican imports. The scheme drew widespread bipartisan opposition because of the impact it would have on the American economy.

The auto industry issued dire warnings last week that the tax would quickly cripple its high-volume supply chain between the two countries.

Mexico and the U.S. issued a joint statement that Mexico will expand two programs that the White House later confirmed were agreed to months ago. One will hike the number of troops Mexico deploys along its southern border to 6,000 from 5,400 to stem to flow of Central American migrants on their way to the U.S. The second deal broadens the “Remain in Mexico” program under which Mexico will hold migrants seeking asylum while they await a U.S. legal ruling on their status.

The U.S. Dept. of State did not released further details about the timeline for the deals, including one that Trump says will be revealed later. Mexico has cautioned that it could take months to produce meaningful results.

In the meantime, the two countries say they will continue to discuss whether further action will be needed on the two initiatives. The Trump administration has indicated it may revive the tariff threat if it is unsatisfied with progress.