Even as talks between Mexico and the United States continue into Friday, and as Mexico steps up its security along the porous Guatemala-Mexico border, the White House plans to proceed with tariffs on all Mexican imports. According to Marc Short, Vice President Mike Pence’s chief of staff, “there’s a legal notification that goes forward today [Friday] with a plan to implement [Mexico] tariffs on Monday.” Short believes there is a possibility, if negotiations continue to go well, that President Donald Trump could change his mind over the weekend.
Trump’s Mexico tariffs are a response to Mexico’s ineffectiveness at stopping what he calls “an invasion” of Central American migrants to the United States. The five percent tariff will be placed on all Mexican imports and will increase another five percent per month until October 2019, unless Mexico stops the flow of undocumented migrants.
While it’s true the tariffs will have a negative effect on Mexico’s economy, what Trump fails to realize is that the U.S. and Mexican economies are extremely interdependent. This year alone, Mexico has swelled to become the U.S.’s largest trading partner. According to the Perryman Group, an economic analysis firm based in Texas, after considering the multiplier effects, the net losses to the U.S. economy from a five percent tariff on Mexican imports to the U.S. economy include an estimated $41.5 billion in GDP and $24.6 billion in personal income each year, with overall job loss of about 406,000.
Furthermore, according to Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, “a five percent percent tariff on about $360 billion percent worth of imports, spread across 100 million households, equals $180 for every American family in a year. If the tariffs gradually increase to 25 percent, that is $900 for each household in a year.” Add to this the economic burden of Trump’s China tariffs, and the real losers of Trump’s “tariff-happy” foreign policy tactics will continue to be Americans.