Administration Threatens Tariffs on Imports from Mexico

On May 30, President Trump declared a National Emergency at the U.S.-Mexican border, and announced that tariffs would be imposed on all goods imported from Mexico, effective June 10.  The emergency declaration and imposition of tariffs are undertaken in response to the pressures of a humanitarian crisis caused by a high volume of illegal border crossings along the southern U.S. border.

According to a release from the White House, tariffs will begin at 5% on June 10.  They will then escalate to 10% on July 1, 15% on August 1, 20% on September 1, and finally reach 25% on October 1. The tariffs may be lifted if Mexico takes “effective actions” to alleviate the crisis. The emergency declaration and tariff threat come on the heels of a broad redeployment of U.S. Customs and Border Patrol to stem the tide of migrants across the border and to reduce significant delays experienced by commercial motor vehicles at ports of entry to the U.S. from Mexico.

The announced tariffs are to be invoked under the authority of the International Emergency Economic Powers Act, or IEEPA. The IEEPA process will require the President to submit a report to Congress laying out the details of circumstances the necessitate use of emergency powers, why those circumstances are an extraordinary threat, exactly which authorities are exercised and actions are taken under the declaration, and identifying which specific actions taken with respect to specific foreign countries.  The Administration must then report on actions taken under the IEEPA process every six months.  The emergency declaration under IEEPA may be terminated directly by the President, by a joint resolution passed by Congress, or automatically if a renewal report is not filed.

Trade across the U.S.-Mexico border is critical to supply chains in every sector of the U.S. economy, and an important part of the businesses of many TIA members.  TIA staff will closely monitor all developments on this issue.  For more information, please contact Will Sehestedt at sehestedt@tianet.org or (703)299-5713.

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