Trump’s New Tariffs Will ‘Cripple’ Auto Industry, Cost American Jobs

President Donald Trump’s new tariffs against Mexico will have serious, negative effects on the US economy. The President announced an initial tariff of 5% on all imports from Mexico, rising 5% a month for three months until Mexico stops immigrants from entering the US.

Though there are a number of problems with this approach, perhaps the most worrying for Republicans is the disastrous effect it will have on the auto industry. US car manufacturing is heavily dependent on imports from Mexico, with companies having extended supply chains that tariffs will ‘cripple’

This will lead to rising costs for auto manufacturers, likely resulting in layoffs and higher prices. Tariffs are paid by the country that imposes the tariff, something Trump has consistently misunderstood. Though the new tariffs will be bad for the Mexican economy, Mexico won’t be paying more to the US.

The tariffs could also endanger Trump’s renegotiation of NAFTA – the so-called USMCA – which he’s been pushing for years. Mexico is very unlikely to agree a comprehensive new trade deal while the Trump administration uses tariffs to push a political agenda.

Moreover, it’s extremely unlikely that tariffs will solve the problem on the US-Mexico border. In the first place, Mexico can not shoulder all the blame for Central American migrants fleeing their countries, nor does it have the capacity to stop and detain them all.

US stock markets are expected to open lower Friday amid dismal international reaction to Trump’s new tariffs, which have been imposed with no action from Congress. The administration may soon have to cope with major economic consequences without any results on the border issue.