How should Mexico respond to Trump's tariffs?
The Trump admin has announced a 5% tariff on all goods imported from Mexico, set to rise to 25% in October:
https://www.google.se/amp/s/www.nyti...riffs.amp.html
Quote:
tariffs would be raised to 10 percent on July 1 “if the crisis persists,” and then by an additional 5 percent each month for three months. They would remain at 25 percent until Mexico acted, he said.
This is not only dumb but also an abuse of the president's tariff-setting powers. Congress seems to be content with ceding more and more power to his imperial highness the president, so a more important question is:
What should/will Mexico do?
To be clear, the tariffs will, like all tariffs, hurt US businesses and consumers. The supply chains of many important companies are heavily reliant on Mexico. At a minimum, even if you ignore broader knock-on effects, this constitutes an unpredictable $17 billion tax the US has chosen to impose on its own economy.
But Mexico now has an opportunity—and ample justification—to severely punish farmers in Trump-supporting states, leveraging the effect of the Chinese tariffs for maximum effect. On the one hand, this would harm Mexican consumers, but, on the other hand, it may be the only way to force the US—no longer a good-faith trading partner—to get a grip.
