President Donald Trump recently vowed to impose tariffs on all goods from Mexico, starting at 5 per cent and going up until the surge of illegal immigrants from there stops. The decision, announced unexpectedly on Twitter followed by an official statement, is being reportedly perceived as a direct challenge to Mexican President Andres Manuel Lopez Obrador.
Higher tariffs will start at 5 per cent on June 10 and increase monthly till those reach 25 per cent on October 1, unless Mexico takes immediate action, global newswires quoted Trump as saying.President Donald Trump recently vowed to impose tariffs on all goods from Mexico, starting at 5 per cent and going up until the surge of illegal immigrants from there stops. The decision, announced unexpectedly on Twitter followed by an official statement, is being reportedly perceived as a direct challenge to Mexican President Andres Manuel Lopez Obrador.#
Trump said he was acting under the powers granted to him by the International Emergency Economic Powers Act. He campaigned for election in 2016 on a vow to crack down on illegal immigration.
The decision is also being seen as a factor that may deteriorate economic ties between two neighbours heavily dependent on cross-border flow of goods.
“If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgement, the tariffs will be removed,” Trump said.
The Mexican peso, US stock index futures and Asian stock markets tumbled on the news, including the shares of Japanese automakers who ship cars from Mexico to the United States.
US officials said 80,000 people are being held in custody with an average of 4,500 arriving daily across the southern border, overwhelming the ability of border patrol officials to handle them.
White House acting chief of staff Mick Mulvaney told reporters the United States wants to see the Mexican Government act at the soonest possible.
Meanwhile, president of the National Council of Textile Organisations (NCTO) Kim Glas expressed concern over the decision and said in a statement that adding tariffs to Mexican apparel imports, which largely contain US textile inputs, would significantly disrupt this industry and jeopardize jobs on both sides of the border.
It will rather accelerate substantially the immigration issues the administration is seeking to address, said Glas.
The magnitude of the trading relationship with Mexico is significant for the US textile industry, representing $12.2 billion in two-way textile and apparel trade in 2018. The U.S. textile industry alone exported $4.7 billion in yarn and fabrics to Mexico last year and had a net export surplus of $3.8 billion. As a result, Mexico is the single largest market for US-made textile exports, according to NCTO.
The step would also give a significant competitive advantage to China, which already accounts for about 38 per cent of apparel and textile imports to the United States, Glas added. (DS)
Fibre2Fashion News Desk – India
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