WASHINGTON - President Donald Trump on Thursday said he would impose a 5 percent tariff on all goods entering from Mexico next month unless it stopped the flow of illegal immigration to the United States, a dramatic escalation of his border threats that could have sweeping implications for both economies.
Trump, in a series of Twitter posts, said the import penalties would go into effect June 10. He added they would increase in size until all illegal immigration across the border halts, though that scenario has never occurred in modern U.S. history.
He wrote that the tariffs would be applied to "all goods coming into our Country from Mexico, until such time as illegal migrants coming into our Country, STOP."
Effective June 10, the president intends to impose a 5 percent tariff on every good coming from Mexico, White House officials said. The tariffs would then increase by 5 percent on the first day of each month, starting on July 1.
Mexico exported $346.5 billion in goods to the United States last year, from vehicles to fruits and vegetables. And many manufactured goods cross the border several times before they are sold to U.S. consumers.
The economic consequences of Trump's new plan could be swift and severe. U.S. companies will be required to pay the tariffs in the form of import penalties, and they often pass those costs along to consumers.
"This is huge because it really substantially hinders the operation of tightly woven supply chains across North America," said Eswar Prasad, a senior professor of trade policy at Cornell University.
Trump has often tried to use tariffs and other import penalties as a way to pressure countries into changing behavior, but he has not yet done it on such a scale. In addition, he mistakenly has described the cost of tariffs as being carried by the countries that he targets.
Even some White House officials were caught off guard by the announcement, though planning within the West Wing escalated on Thursday afternoon. Vice President Mike Pence was in Canada on Thursday meeting with Canadian Prime Minister Justin Trudeau about ratifying an updated version of the North American Free Trade Agreement with Mexico, but it's unclear if Trump's newest tariff threat could upend those discussions.
White House officials believe Trump has powers under a 1977 law to impose tariffs on all imports from certain countries if he cites a "national emergency." And several months ago, Trump declared a national emergency along the Mexico border because of a surge in migrants crossing into the United States.
But the 1977 law has never been used to impose tariffs in this way before, and Trump's new actions could face legal challenges because of the scope of companies that would be impacted. Prasad said many importers have narrow margins and a 5 percent import penalty could wipe out their income.
The new tariff threat combines two of Trump's favorite issues - immigration and trade - and comes as he has struggled to score victories on both.
A central element of Trump's campaign was his assertion that the United States was being "invaded" by people across the Mexico border, a sentiment that resonated with many of his supporters. He has tried to rework trade rules and build a wall to stop the flow of migrants, but many of his efforts have failed and the surge of migrants has only increased.
The administration is bogged down in an escalating trade war with China that has damaged farmers and other U.S. producers, while crossings at the U.S.-Mexico border driven by Central American migrants seeking asylum have peaked to their highest level in more than a decade.
One senior White House official said there is broad support across the administration to push Mexico further by using tariffs to force action. Other aides, however, tried to talk Trump out of the idea, arguing that the threat would scare global markets and undermine passage of the United States-Mexico-Canada Agreement, or USMCA, which was just sent to Congress on Thursday by the White House. The trade deal aims to curb the type of tariffs Trump is now threatening to impose if Mexico does not stop the migrants.
The president teased his plans on Thursday morning, telling reporters outside the White House that he was preparing a "big-league statement" about the border surge, without going into detail.
"We are going to do something very dramatic on the border because people are coming into our country," Trump said.
On Wednesday, more than 1,000 Central Americans crossed into the El Paso area to surrender to U.S. authorities, the largest group of migrants that U.S. border agents have taken into custody in a single event. Trump tweeted a video of the apprehension late Thursday, declaring that "Democrats need to stand by our incredible Border Patrol and finally fix the loopholes at our Border!"
Deportations by Mexican authorities have increased threefold compared with the same period last year, according to the latest statistics, but the vast majority of Central American migrants appear to be successful at evading arrest en route to the U.S. border.
Mexican President Andrés Manuel López Obrador campaigned last year on a promise to decriminalize migration and told audiences it was not Mexico's job to assist the United States with the "dirty work" of deportations.
Trump has backed down on previous threats aimed at Mexico, including abandoning his repeated campaign promise to make that country pay for a border wall. Trump is now using the powers of his national emergency to redirect U.S. taxpayer funds for construction of replacement fences and barriers along the border.
In late March, Trump said he would immediately shut down the entire Mexico border if the Mexican government didn't take more steps to prevent the flow of migrants, only to announce a week later that he would delay any action for a year. White House officials had spent days frantically trying to design how such a shutdown would be implemented.
The draft trade agreement sent to Congress on Thursday would, if ratified, replace the 1994 North American Free Trade Agreement. The draft allows Trump to send a final agreement in 30 days, a timeline intended to pressure House Speaker Nancy Pelosi (D-Calif.), who along with other Democrats wants changes to the agreement before any vote.
The top imports from Mexico include vehicles, electrical machinery, machinery, mineral fuels, and optical and medical instruments, according to the Office of the U.S. Trade Representative. The United States also imports a large amount of agricultural products from Mexico.
A March 2019 report from the Congressional Research Service said that the International Emergency Economic Powers Act had never been used before "to place tariffs on imported products from a specific country" but that it could be interpreted as giving the White House that power.
Along the Mexico border, U.S. agents have detained more than 100,000 migrants for each of the past two months, and the numbers in May are expected to be the highest yet.
In recent months, smuggling organizations have been moving large numbers of migrants from southern Mexico using "express buses" that reach the U.S. border in a matter of days. The buses make few stops and have lowered the costs for migration, making the journey faster, easier and cheaper for would-be customers.
U.S. officials say corrupt Mexican officials are allowing the buses to pass through highway checkpoints and in other cases facilitating their travel to the border by providing security escorts.
Mexican officials have said they're doing everything they can to regulate the migration surge, and they provide police escorts in some cases to prevent criminal organizations from kidnapping and extorting families traveling with small children.
A Mexican official, speaking on the condition of anonymity, said trade-related talks with U.S. officials have remained "positive," and noted that López Obrador was also preparing to send the trade deal to lawmakers for approval. The official declined to say whether the White House has conditioned the deal on a migration crackdown by Mexican authorities.
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The Washington Post's Colby Itkowitz contributed to this report.
This article was written by Nick Miroff, Josh Dawsey and Damian Paletta, reporters for The Washington Post.