As Mexico Beefs Up Its Border, Tariffs Still Lurk on Monday

Friday brought a third day of talks aimed at preventing a U.S.-imposed tariff on Mexican goods. Late last month, the White House warned that a 5 percent import levy would hit Mexican goods on June 10th, rising to 10 percent by July and 25 percent by October, if Mexico doesn’t stem the flow of illegal migrants travelling through its country to reach the U.S.

Going into the weekend, the threat still stands. There are, however, signs of progress both from the U.S. and its southern neighbor.

You wouldn’t know it from comments by White House Press Secretary Sarah Sanders, who said Friday, “Our position is still the same and we’re moving forward with the tariffs” on Friday, as reported by Reuters.

Sanders added that meetings between the two sides have gone well, but not well enough to head off Monday’s tariffs. A legal notification of the tariffs is expected today.

Speaking to reporters in Mexico City, Mexican President Andres Manuel Lopez Obrador put on his optimistic face, saying, “There is dialogue and an agreement can be reached. I’m optimistic we can achieve that.”

On Thursday, Mexico deployed police and military forces to its border with Guatemala, hoping to harden its southern flank against the flow of Central American migrants. As reported by the Guardian, Vice President Mike Pence said he was “encouraged” by Thursday’s talks, but added that the final decision would be Trump’s.

Today, Trump took to Twitter to suggest, among other things, that Mexico might avoid the looming tariff by purchasing U.S. agricultural products.

“If we are able to make the deal with Mexico, & there is a good chance that we will, they will begin purchasing Farm & Agricultural products at very high levels, starting immediately,” Trump tweeted. “If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!”

Any tariff levied on Mexican goods would be a nightmare scenario for domestic and foreign automakers, raising sticker prices on vehicles sold in the world’s second-largest auto market. Automakers are already contending with a slumping Western car market, increasingly stringent emissions regulations, a pricey plunge into electric vehicle development, and faltering Chinese sales. Interesting times.

[Image: General Motors]