Mexico: Trade pressures from the US - TDS

TD Securities analysts note that the US President Trump unexpectedly announced that the US administration will impose and then increase tariffs on all Mexican goods until illegal migration flows from the country are stopped.

Key Quotes

“Trump said that, if the crisis persists, a 5% tariff will be imposed on all Mexican imports starting on June 10. Tariffs will then be raised to 10% on July 1, to 15% on August 1, to 20% on September 1 and to 25% on October 1. As Mexico exports approximately 80% of its total exports to the US, the imposition of tariffs would have a dramatic impact on its economy, and uncountable ripple effects.”

“Asked to provide his view on the matter, Jesus Seade, Mexico's undersecretary of foreign relations for North America, responded to reporters that Mexico won't "sit on [its] hands" but hopes the threat is "not something that will be put into action" otherwise Mexico will "need to respond in a strong way."