The United States and Mexico were able to reach an agreement last week that prevented additional tariffs from going into effect on June 10. The potential for a five percent tariff on Mexican goods was averted after President Donald Trump announced that Mexico would address the surge of Central American migrants coming to the southern border of the U.S.
However, the President followed up with an additional Tweet indicating the additional tariffs were still on the table if there were an issue with the vote in Mexico. The possibility for a future tariff increase was also eluded to in a joint statement released by the U.S. and Mexico.
“Both parties also agree that, in the event the measures adopted do not have the expected results, they will take further actions. Therefore, the United States and Mexico will continue their discussions on the terms of additional understandings to address irregular migrant flows and asylum issues, to be completed and announced within 90 days, if necessary.”
The White House initially announced plans for a five percent tariff to be imposed on Mexican goods coming into the U.S. unless Mexico made efforts to address migrants seeking asylum. The tariff rate would incrementally increase by five percent each month, until eventually reaching 25 percent in October. The last-minute agreement that was reached was appreciated by many politicians and farm groups concerned about the impact of additional tariffs.
“The United States looks forward to working alongside Mexico to fulfill these commitments so that we can stem the tide of illegal migration across our southern border and to make our border strong and secure,” U.S. Secretary of State Mike Pompeo said in a statement.
The agriculture industry had been uneasy about what another set of tariffs would mean for the U.S.-Mexico-Canada-Agreement (USMCA). While the particulars of the USMCA deal have been agreed to by all countries involved, the agreement is still pending ratification by all three counties.