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A Trial Run For Mexico

In this Article we will take a look at the use of tariffs as a strategy to curb illegal immigration.

Posted  136 Views updated 1 month ago

Our largest supplier.

The Trump administration can officially claim a temporary, victory in an effort to bring Mexico to the table on immigration. Mexico will be given a 45 day timeline to curb illegal immigration across its borders, so as to avoid a 25% increase on Tariffs.

According to reports from BBC, their proposed steps will be re-evaluated on or around mid July 2019. Mexico, so far has committed to Mexico deploy its National Guard throughout the country, with 6,000 additional troops being sent to its southern border with Guatemala.

During President Trumps first year in office, Illegal border crossings reached an all time low but is starting to show a steady increase. Mexico is the largest supplier of goods to the US. Last year, according to a variety of sources, including Goldman Sachs, we imported approximately $352bn (£275bn).

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Increasing exports.

Could Trump effectively use Tariffs to close the gap on our current trade deficit? This would be considered by most a very radical strategy. By definition, a trade deficit is considered to be the amount by which the cost of a country's imports exceeds the value of its exports. This is equivalent to living above your means. A more orthodox approach would be to renegotiate a trade deal that benefit both sides and balance the books at the time. In the case of The United States, with most of our manufacturing jobs gone, what can we actually produce of value to export? 
As of January 2019, according to the consensus bureau we gained 21,913.7 in exports but imported 27,681.7 in goods, which leaves The United States at a 5,768.0 loss. Our year to date exports ending April 2019 was 86,168.6. Our total import cost averaged around 117,010.7, leaving a first quarter deficit of 30,842.2. goods with Mexico.
NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless otherwise specified. Details may not equal totals due to rounding. Table reflects only those months for which there was trade.

A 25% increase in Tariffs on all Mexican goods will definitely have an impact on balancing the books, but may not be practical. Taking into consideration the morality involved, along with the option of retaliatory tariffs just to get even. Which became apparent in the China and other nations.


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