Business groups urge Trump to back down on tariff threat

MEXICO CITY: Mexico’s president and the top US business lobbying group called on President Donald Trump to back down from a threat to impose punitive tariffs on Mexican imports, in a dispute over migration that could shock Mexico’s economy.
Trump said he will introduce the tariffs on June 10 if Mexico does not halt the flow of illegal immigration, largely from Central America, across the US-Mexican border, battering Mexican financial assets and denting global stocks.
The ultimatum from Trump is the biggest foreign policy test to date for Mexican President Andres Manuel Lopez Obrador and a tall order for Mexican security forces struggling not only to combat migrant flows but also to fight a record level of gang violence and homicide.
Mexico’s economy, which is heavily reliant on exports to the United States, shrank in the first quarter and would reel under US tariffs that could reach as high as 25 per cent this year under Trump’s plan.
Veteran leftist Lopez Obrador, who took office in December, predicted that Trump, who is also engaged in a worsening trade war with China, would ease up on his demand.
“I tell all Mexicans to have faith, we will overcome this attitude of the US government, they will make rectifications because the Mexican people don’t deserve to be treated in the way being attempted,” Lopez Obrador told reporters.
In April, Trump took a step back from an earlier threat to completely close the US border with Mexico to fight illegal immigration, under pressure from companies worried it would cause chaos for businesses. The tide of migrants crossing from Mexico has swelled, with US officials saying that an average of 4,500 are arriving daily.
Global equities tumbled and safe-haven sovereign bonds surged Friday after Trump’s unexpected threat added to fears that escalating trade wars will push the United States and other major economies into recession.
Mexican Foreign Minister Marcelo Ebrard said he would attend talks with US Secretary of State Mike Pompeo in Washington on Wednesday to discuss the tariff issue.
The influential US Chamber of Commerce is looking at ways to challenge Trump’s tariff move against Mexico, including legal options. “We have no choice but to pursue every option available to push back,” Neil Bradley, the business group’s executive vice president and chief policy officer, told reporters. — Reuters