Donald Trump has used his favorite social network to announce an import tax on Mexican products that can be disastrous at so many levels.
Trump Uses Taxes to Get What He Wants… Again
Donald Trump has dropped another “tax bomb,” announcing on Twitter that the U.S. government is going to impose a 5% duty on the goods imported from Mexico. The American president will use this restrictive measure as an attempt to prevent people from Central America from immigrating to the USA.
Tax on Import as a Powerful Political Weapon
Trump is a master of sensationalism who doesn’t shy away from making erratic or irrational statements and decisions, but this time, he went too far. Another import tax, now aimed at Mexico, could seriously endanger the prosperous United States–Mexico–Canada trade agreement. What makes things even more confusing is that Trump relies heavily on the success of the USMCA agreement, as he is going for re-election in 2020.
This absurd tax will also put additional strain to already tense relations between two neighboring countries, caused by Trump’s immigration policy. The Mexican president reacted promptly by issuing a public letter in which he reminded his colleague from the USA that he couldn’t use restrictive economic measures as a kind of a quick fix for various burning issues, including the social ones. He also stressed out that America’s foundations were built by generations and generations of immigrants.
However, Trump carried on to blame the Mexican administration for letting people from El Salvador or Honduras flock to the American border across the Mexican territory. He added furiously that these import taxes might gradually increase if Mexico doesn’t take more efficient steps towards stopping the excessive flow of illegal immigrants to America.
Trump tends to make these “breaking news” decisions as a part of his upcoming presidential campaign, since solving the immigration issue was one of the major promises that ushered him into the White House.
The Negative Effects of the Tax Threat
This is a somewhat controversial announcement, especially because it comes only two weeks after the U.S. president had canceled taxes on aluminum and steel imposed on both Canada and Mexico, countries involved in the USMCA agreement. By making this move, Donald Trump removed the last barrier that prevented these three countries from reaching this prosperous trade agreement.
The tables have turned quickly, since the announcement of such strict measures may put the entire USMCA project into a deep freeze. For this reason, economic experts share the same opinion that this measure is “preposterous,” even though Trump has the power to implement and present it as a “national emergency.”
This is not the first time this year that Trump has played the card of illegal immigration. In March, he even went so far in his threats that he wanted to close the entire border with Mexico unless they took some determinate actions and stopped illegal immigrants.
He rushed to take back this ludicrous decision a couple of days later, claiming that he was pleased with steps the Mexican administration took towards solving this burning issue.
Although no one to this day has a clue what exact steps the president referred to.
What Can Mexico Do?
As some administration representatives pointed out, there are some measures that the Mexican Government can actually take to battle the illegal immigration issue effectively.
First, they can try to crash the drug trafficking criminal organizations. They can also secure their border with Guatemala in a more efficient way. There is also an option of entering a “safe third country agreement,” which will make it impossible for immigrants coming to Mexico from other countries to file for American papers. Some of these officials clearly separate the USMCA deal as a trade issue from the tax imposition related to the immigration issue.
However, some angry voices regarding the tax threat come from Trump’s Republicans.
One of the senators, who usually backs up every decision Trump makes, believes that this move is an abuse of presidential power and that it will hit an average American consumer hard while putting in danger the USMCA agreement.
Whether the whole thing is just a staged show aimed to please supporters or a strategy that Trump plans to stick to, the latest announcement has clearly made a lot of people mad at both sides of the border.
The irony lies in the fact that this restrictive measure towards Mexico comes at the time when Mexico is putting some serious effort in preventing people from crossing the US–Mexico border. They have started to keep thousands of refugees on the border with Guatemala and denying them visas needed to enter Mexico.
They also increased the number of raids they conduct in this area. However, none of these Mexican actions seem to make Donald Trump happy. He is going to carry on with his plan to impose a tax that will gradually increase if Mexico doesn’t live up to his expectations.