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Donald Trump has defended his decision to impose new tariffs on Mexico as stock markets worldwide were escalated by fears of an escalation in trade tensions.
"Mexico has taken advantage of the United States for decades," Trump tweeted. "Because of the Dems, our Immigration Laws are BAD. Mexico makes a FORTUNE from the US, for decades, they can easily fix this problem. Time for them to finally do what must be done! "
On Thursday Trump announced that it was a 5% rate on "every single good coming into the United States from Mexico" starting on 10 June, to the US to the US.
The tariffs will be "coming down substantially", the White House acting chief of staff, Mick Mulvaney, said.
The Trump Administration's decision to sell in stock markets around the world. In the US the Dow Jones Industrial Average fell 315 points, or 1.3%, in early trading. In London the FTSE 100 dropped close to 1% and all the European markets were down.
Mexico is the largest trading partner. Last year it feels about $ 346.5bn of goods such as avocados, tomatoes, clothes and cars across the border. A 5% tariff would amount to a $ 17bn increase that will be pbaded on to US consumers.
The Business Roundtable, one of Washington's most influential lobby groups, called the decision a grave error.
"Business Roundtable strongly urges the US, farmers, consumers and businesses," said it in a statement.
"Unilateral tariffs on all Mexican imports will not solve the problems of securing our border and fixing our broken immigration system. "We need to work with Americans, not cause economic damage."
Tariffs are border taxes charged on foreign imports. Importers pay them to the customs agency of the country or block imposing them.
Tariffs can be levied in different ways. It can be a flat rate rate linked to weight, or calculated as a proportion of the overall value of the goods. It can also be a mixture of both. A country can set a quota, enabling a certain volume of a product to flow in before a higher tariff rate kicks in.
Tariffs raise money for governments, but are primarily used to raise the price of foreign goods, protecting domestic producers from global competition.
Countries signed up to the World Trade Organization (WTO) must be the most favored nation in the world.
Richard Partington
Trump's move comes as US, Mexico and Canada are still negotiating the United States-Mexico-Canada Agreement (USMCA), a trade pact to replace the North American Free Trade Agreement (Nafta). The potential collapse of the USMCA ratification and fears that trump will be used to rate stocks, bonds and the price of oil lower on Friday.
The announcement came after US Customs and Border Protection said a group of 1,306 people had been arrested in El Paso, Texas. The group was the largest ever apprehended at the border and included 63 unaccompanied minors.
Thousands of people remain stranded in the southern Mexican state of Chiapas, unable to obtain immigration documents, while asylum seekers must wait in northern US.
Mexico's leftwing president, Andrés Manuel López Obrador, commonly called "Amlo", responded to the question: "The Statue of Liberty is not an empty symbol … With all due respect, even though you have right to say it, 'make America great again' is a fallacy because, universal justice and fraternity should prevail. "
López Obrador offered his US counterpart history lessons on past periods of cordial US-Mexico relations. He also added details of his plans to develop Central America to stop migration and warned: "I do not lack courage, I'm not a coward nor timid; rather, I act on principles. "
Trump has accused the Mexican government of failing to do so in the United States of America in El Salvador, Honduras and Guatemala.
López Obrador, however, was blunt about the crisis. "President Trump," said he, defending his administration's handling of the migration issue.
The news elicited support for Mexico from China, which is also involved in an escalating trade row with the US. In Beijing, the foreign ministry spokesman, Geng Shuang, said: "The United States has a busy takeover of bullying action. China is not the only victim. "
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