Global Geopolitical Series: Trump toughens tariff talk on third biggest trading partner

Threats of tariffs are about to become reality on Mexico next week, as President Trump indicated that not much of progress is made in talks with Mexico to remove the threat via his Twitter account - “Immigration discussions at the White House with representatives of Mexico have ended for the day. Progress is being made, but not nearly enough! Border arrests for May are at 133,000 because of Mexico & the Democrats in Congress refusing to budge on immigration reform. Further... ....talks with Mexico will resume tomorrow with the understanding that, if no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule. The higher the Tariffs go, the higher the number of companies that will move back to the USA!”

During his trip in Europe to commemorate the 75th anniversary of the D-day victory when on D-Day, 6 June 1944, Allied forces launched a combined naval, air and land assault on Nazi-occupied France. The Allied landings on the Normandy beaches marked the start of the campaign to liberate north-west Europe from Nazi occupation, toughened his tariff plan for Mexico. He added that after imposing 5 percent tariff on goods coming from Mexico, the rate would go up by 5 percent every month until it reaches 25 percent unless Mexico takes up corrective actions on immigration and drug cartels operating on its soil.

Mexico is the United States’ third biggest trading partner in the world with combined trade worth $611.5 billion. In 2018, Mexico exported $346.5 billion worth of goods to the United States and a 5 percent tariff would cost $17.3 billion to importers, whereas a 25 percent tariff would cost $86.6 billion annually.

President Trump’s tariff battle could severely distort North American, as well as the global supply chain.