Trump Tosses Another Tariff Into USMCA Trade Waters

(WASHINGTON, DC) Late Thursday, President Trump announced plans to impose five percent tariffs on all Mexican imports beginning June 10th if Mexico does not stop the flow of Central Americans into the United States. If Mexico doesn’t comply, the Administration is threatening to increase the tariffs up to 25 percent. The threat came on the same day the White House sent a draft “Statement of Administrative Action” to Congress, triggering a process for submission of the new U.S. – Mexico – Canada (USMCA) free trade deal for approval within 30 days. The “Statement” outlines changes that the U.S. will need to make in order for USMCA to go into effect. One day earlier, the Canadian government formally presented draft legislation to parliament that would ratify the replacement to a 25-year-old NAFTA agreement. The move comes after President Trump lifted steel and aluminum tariffs on Canada and Mexico. Canada faces a tight timeline to debate the issue. Their summer recess begins on June 21st and legislators will not return until November. Mexican President Andres Manuel Lopez Obrador sent the renegotiated trade deal for approval to the Mexican Senate. He’s asking lawmakers to hold a special session to approve the deal prior to their next regularly scheduled meeting in September. It’s not clear when the U.S. Congress plans to take up USMCA ratification. However, given Thursday’s announcement about a tariff being imposed on all Mexican imports, it’s unclear what effect this will have on USMCA ratification.