Mexico Warns of Retaliation for U.S. Tariffs

By Anthony Harrup and José de Córdoba

MEXICO CITY—Mexico is exploring possible retaliation to the threat of U.S. tariffs on all of its exports but would rather convince the Trump administration that a negotiated solution is in both countries’ best interest, senior officials said Monday.

A high-level Mexican delegation led by Foreign Minister Marcelo Ebrard is in Washington this week for meetings with U.S. officials—including the secretaries of state, commerce and homeland security—to discuss how to reach an agreement. The talks come after President Trump threatened a 5% tariff on all Mexican imports starting June 10 unless Mexico does more to stem the flow of Central American migrants crossing its territory to reach the U.S. The tariffs would rise each month to reach 25% by October, Mr. Trump said.

Mexican Economy Minister Graciela Márquez said Mexico could take several paths if the U.S. goes ahead with the tariffs. It could resort to multilateral organizations, such as the World Trade Organization, for assistance she said, but those processes are slow. Or it could hit back with tariffs on selected U.S. goods.

“We’re getting prepared but we trust that diplomacy and actions to persuade and convince to maintain integration and trade relations will work,” she said. “We don’t want to use tariffs to damage value chains, or to damage the creation of jobs, or damage investment; rather, we want free trade to prevail in North America.”

Last year Mexico retaliated against U.S. tariffs on steel and aluminum with its own tariffs on $3 billion in imports from the U.S., including bourbon, pork and steel products. That dispute was settled with an agreement reached last month.

Mexican officials warned that tariffs could seriously damage Mexico’s export-oriented economy, raising costs for many U.S. firms operating in Mexico and prices for U.S. consumers. It could also tip Mexico’s economy into recession, prompting more Mexicans to try to migrate to the U.S.—the opposite of what the Trump administration wants.

Deputy trade minister Jesús Seade said tariffs would also place “an enormous boulder in the road” toward ratification of the U.S. Mexico Canada Agreement, which was negotiated last year to replace the North American Free Trade Agreement.

“The right thing to do is to continue perfecting this integration, as we have been doing, renegotiating Nafta, which had good effects but 25 years later was pretty old, lacking in many things,” he said. “And we came up with a very good agreement, one that President Trump himself has very much celebrated.”

For more information, go to: http://www.beverlyhillsimmigrationlaw.com/