EL PASO, Texas (Border Report) — President Trump continues to take Mexico and Canada on a rollercoaster drive with on-again, off-again trade tariffs. The president on Tuesday imposed a 25% levy on all Mexican and Canadian imports alleging neither country has done all it can to stem the flow of migrants and drugs, particularly fentanyl, to the United States.
A day later, he exempted automotive imports from the tariffs, and there is confusion in Mexico as to what exactly is being taxed. Under the US-Mexico-Canada Agreement, still in force when U.S. raw materials and parts go into Mexico or Canada for assembly, only the labor and additional components placed in that part are taxed.
On Thursday, Trump said he is delaying for roughly a month tariffs on Mexican imports that are covered under a North American trade agreement signed during his first term.
This affects the 2,000 or so U.S.-run maquiladoras in Mexico and international law experts are urging them to do their research, apply due diligence and be prepared to contest any excess fees.
But for those who are not into manufacturing, that means preparing to bill their clients extra to make up for the tariffs, with the U.S. consumer being the one to ultimately pay the difference.
Political observers note Trump’s tariffs come at the worst possible time for Mexico, as investors were already leery of rising labor costs on the border and a constitutional change that will allow Mexico to replace experienced jurists with newly elected judges that may not be experts on international trade law.
Also, questions remain as to what’s President Trump’s real end game, given that illegal migration is down to a trickle at the U.S. border, fentanyl seizures are going down and Mexico just handed over 29 of its most notorious drug traffickers and is allowing American spy planes and drones to fly over its territory.