Mexican president promises retaliatory tariffs in US if Trump plan goes in effect
Mexican President Claudia Sheinbaum is pushing back on President-elect Donald Trump's threat to impose steep import taxes.
Mr. Trump says he will add a 25 percent tax on goods from Canada and Mexico on his first day in office.
"I will sign all necessary documents to charge Mexico and Canada a 25% tariff on ALL products coming into the United States...This tariff will remain in effect until such time as drugs, in particular fentanyl, and all Illegal Aliens stop this invasion of our country!" Trump wrote on Truth Social.
The president-elect says the tariffs are in response to Mexico and Canada not doing enough with the border and fentanyl.
Mr. Trump also said he would increase the import tax on China by 10 percent.
"He may be all over the map on some things, but not on this. He's definitely committed to tariffs," said Mike Davis, an SMU economist.
Davis says the impact of the tariffs will likely lead to a rise in prices of things like produce and cars.
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"Almost all the costs of the tariff is going to be shifted to the consumer," said Davis.
Canadian Prime Minister Justin Trudeau says he spoke to President-elect Trump and hopes both sides can work together.
The president of Mexico said her country has already done a lot to stem the flow of migrants, but said she is willing to engage in talks.
"One tariff would be followed by another in response," Sheinbaum wrote.
Davis said about 20 percent of cars sold in the US are manufactured in Mexico.
"Just think about going to the car dealership and the price of the car you want to buy is 20 percent more. You know, all of those costs are transferred over to the consumer eventually," he said.
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Trump also imposed tariffs during his first term, especially on Chinese imports, but not to this level.
The Biden Administration kept some of those tariffs in place.
It's possible Trump might use the threat of import taxes as leverage for negotiations, but if he does follow through, Davis says consumers could feel the impact quickly.
"Any retaliation that's coming from Mexico or Canada will be damaging to U.S. interests," Davis said.