Global markets were shaken Friday after President Trump said that the U.S. will impose tariffs on Mexican imports in an effort to stop the flow of illegal immigration to the southern border. In the wake of the the news, the Dow fell 253 points, or about 1 percent, when markets opened on Friday. The S&P 500 sank 0.8 percent to 2,766, while the NASDAQ fell 1.2 percent to 2,475.
Trump’s announcement, made Thursday on Twitter, called for a 5 percent tariff on all products from Mexico to take effect on June 10.
On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,..
— Donald J. Trump (@realDonaldTrump) May 30, 2019
The U.S. will progressively raise tariffs to 25 percent by October if Mexico refuses to take action on immigration, according to the White House.
“Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” the White House said.
American companies Ford and Walmart trade heavily wit Mexico. About 6 million American jobs rely on trade with Mexico, according to the U.S. Chamber of Commerce.
Mexican president Andrés Manuel López Obrador criticized the tariffs late Thursday, saying that “social problems are not resolved with taxes or coercive measures.”
“The Statue of Liberty is not an empty symbol,” Obrador said. “With all due respect, although it has the sovereign right to express it, the motto ‘America First’ is a fallacy.”
Trump warned about his tariff plan in April of last year, writing on Twitter that Mexico must “stop the big drug and people flows, or I will stop their cash cow, NAFTA [North American Free Trade Agreement].”
Border authorities has been overwhelmed in recent months with tens of thousands of migrants, most from Central America, traveling through Mexico and crossing the southern U.S. border legally and illegally.