Mexico has every reason to retaliate. Trump has repeatedly attacked Mexico with inflammatory rhetoric, but Mexicans, knowing the economy is too fragile to mess with, have kept the peace by avoiding confrontation. They have also done plenty when it comes to immigration, it’s just that Trump wants more. If Trump messes with the economy, then what’s left for Mexico to lose?
1. The costs of things go up, affecting you directly
Simply put: if producers have to invest more money on their products, consumers will have to pay more for them. The first thing you need to understand about free trade and tariffs is that the immediate effects are felt on consumers. However, because the US economy is so intertwined with the Mexican economy, farmers and businesses will also take a hit. And that’s with Mexican retaliatory tariffs.
The US and Mexico produce “1 million dollars a minute.” That’s $678 billion dollars a year. And if you think: “Oh, well, I guess that’s goodbye to Mexican products,” you couldn’t be more wrong. Mexico exports about 40% of vegetables the US consumes, and it’s not like people are going to stop eating. Unless producers decide to absorb these costs themselves, the tariffs will be paid by common people like you and me.
In fact, specialists are estimating that these tariffs will cost a typical American household about $831 a year; that’s double what it cost them last year (considering the tariffs on Chinese goods).
2. No more tax cuts for you
Trump is the champion of tax cuts. Last year, he pushed a $1.5 trillion tax cut for all, but tariffs threaten to wipe all of that out, since they will leave people with less money to spend on products.
3. The US and Mexico will no longer form a team that supports jobs
Mexico is not America’s competition. Their relationship supports 5 million jobs in the US, and their economic cooperation helps them compete with China. Mexico is the American farmers’ third market, a market that buys $19 billion dollars from the US. If Trump imposes tariffs on Mexico, Mexico will impose tariffs on these products as well. Mexican consumers would have trouble buying these products, which means the US agricultural industry will lose a huge market. How will Americans find a replacement quickly?
4. The US would be taxing itself
Like I said, the US and Mexico form a team. Some industries work together to make their products. Take cars, for example: a door could be made in Mexico, then sent to the US where it will be put together with something else, then sent back to Mexico, then back to the US. That would mean it would be taxed several times for a product that is at least partially made in the US, which would multiply the cost of the said product, thus hurting American industries.
5. US security would be hindered, not improved
Believe it or not, Mexico and the US cooperate on issues like drug trafficking and, yes, immigration. Without US support, Mexico has no need to help the US fight the drug trade. Not only would cooperation be difficult and tense, but Mexican jobs would also be lost because its economy would suffer a major setback. This would, in turn, encourage more people to search for jobs north of the border.
Also, Mexico is currently hosting 25,000 asylum seekers at the behest of Trump, including people who have been identified as having criminal connections. What will happen when Mexico decides it’s not their problem to send them back to their countries?
6. Farewell, USMCA
Tariffs are the exact opposite of the trade deal Trump took credit for. One of his Administration’s successes had been to close a deal with Mexico and Canada. He panned NAFTA so hard, that he just had to come put with something better. Though many people believe the USMCA is pretty much the same deal, you have to acknowledge it is an up-to-date deal. But a trade war with Mexico goes against his own interests. Without a deal, what does Trump have to show for?
Whatever you think about immigration, the path to a trade war with Mexico is suicide for America’s economy. Think about how Trump’s tantrums and rash decisions will affect you and your community.
If Trump Shuts The Border, Say Goodbye To Avocado (And Millions Of Jobs)
Trump Sets “Colossal Blunder” In Motion By Imposing Tariffs On Mexican Goods
