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After threatening to close the border this week, Trump moved the goal posts Thursday, saying he would give Mexico a year. Friday, he backed up,
tweeting that Mexico apprehend "for the first time in decades" illegal immigrants before crossing the border.
"However, if, for whatever reason, Mexico stops apprehending and bringing the stowaways back to their place of origin, the United States will be forced to tax 25% of all cars manufactured in Mexico and shipped from the border up to us.If that does not work I will close the border, "he
wrote.
"It will replace the USMCA," he added.
This declaration could jeopardize the ratification of the trade agreement, which is intended to replace the North American Free Trade Agreement. Trump called the original pact one of the worst contracts he has ever seen and touted the USCMA as a remarkable accomplishment of his administration. Vehicles manufactured in North America would remain exempt from customs duties, provided that most of their parts are manufactured in the three countries and by workers earning at least $ 16 at the hour.
The agreement was signed by Trump and his counterparts in November, but must be ratified by their respective legislative bodies before coming into force.
"For me, this would somehow incite Mexico to not act as quickly to ratify the USMCA," said Welles Orr, who was deputy trade representative in the United States under President George H. W. Buisson.
Trump loves to suspend the threat of auto tariffs in international negotiations and suggested in February to impose duties on vehicles manufactured within the European Union.
A spokesman for the American Automotive Policy Council – representing Ford, GM and Chrysler – did not respond to the request for comment on Friday. But the three manufacturers have strongly protested Trump's previous threat to impose tariffs on vehicles and auto parts around the world. If US mills could benefit if tariffs are applied to foreign vehicles, auto parts taxes could have a crippling effect. Almost all American models are built using components.
American and Mexican builders have highly integrated supply chains and over $ 100 billion worth of vehicles cross the border every year. Some US companies have factories in Mexico and the tariff would make these cars more expensive for Americans. Production could slow down and affect parts suppliers north of the border.
"It is very painful to waste time if these rates come in. In the end, American consumers will pay more for vehicles, and several sectors of the US economy would be affected," said Charlie Chesbrough Chief at Cox Automotive, which operates Kelley Blue Book and Autotrader.
Trump imposed tariffs on imports of steel and aluminum last year, making some parts more expensive for automakers – but did not trigger the pressure on them. car rates. Last year, he first asked the Commerce Department to investigate whether imported vehicles and parts posed a threat to national security. The findings of the report have not been made public, but Trump has until the middle of May to make a decision.
The proposed 25% tariff avoids threatening to close the border completely. An economist predicted that this would result in the complete closure of the US auto industry in a week because every US auto plant depends on parts manufactured in Mexico.
"At this point, I think the industry is just picking up what the president says with a grain of salt. It says a lot, but in reality, it has not yet implemented much," he said. said Chesbrough.
CNN's Maegan Vazquez contributed to this report.
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