Defenders of President Trump’s trade wars have tried to argue that his reckless moves are actually part of a cunning strategy to lower tariffs, knock down trade barriers, and usher in true free trade. But Trump just threw that defense out the window by announcing a plan to impose a 5% (and escalating to 25%) tariff on Mexican imports “until the Illegal Immigration problem is remedied.”
This is mindbogglingly stupid on so many levels.
First, in the most direct way, raising tariffs on Mexico will mean a tax increase of up to 25% on American families and businesses purchasing any products from Mexico, one of the U.S.’ leading trade partners. In 2018, Americans imported $346.5 billion in goods from Mexico, so on that basis it would amount to a nearly $87 billion tax increase. It also will punish industries that will be affected by inevitable retaliatory tariffs.