The President has threatened to slap tariffs on the import of all cars in a year if Mexico does not completely halt the flow of illegal immigration, a near impossible task. This is after he backtracked on his previous threat to completely close the US-Mexico border, a move his own advisers recommended against. Such actions would have massive economic repercussions on both sides of the border, raising prices for many consumer goods.
Trump said, "Mexico understands that we're going to close the border or I'm going to tariff the cars. I'll do one or the other. And probably start with the tariffs". He further added, "I don't think we'll ever have to close the border because the penalty of tariffs on cars coming into the United States from Mexico, at 25%, will be massive".
One problem with this threat is the fresh trade agreement with Mexico that Trump has already negotiated. Going back on a fresh trade agreement adds to the longtime concerns by other world leaders on whether Trump's word, and the U.S. Government, can be trusted. Tariffs on imported goods aren't paid by the exporting country, they are paid by the consumers of the importing country, so it is unclear who Trump is targeting with these tariffs.
One of the biggest automotive importers from Mexico is General Motors. GM recently had to remove a Chevrolet Blazer display from a stadium in Michigan after backlash over its Mexican origin. GM has recently closed two plants in Michigan costing the state thousands of jobs.
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