A US Customs and Border Protection photograph of some of the 1,036 migrants who crossed the border into the United States together at El Paso, Texas, on May 29 (USBPA Edward Butron El Paso Sector)

Washington (AFP) – President Donald Trump escalated his surprise tariff threats against Mexico on Friday, triggering alarm about the likely economic fallout, spooking global markets and raising the prospect of US trade wars on multiple fronts.

Trump announced his readiness to levy tariffs on all Mexican imports, beginning at five percent starting June 10 and rising to as high as 25 percent in coming months until Mexico substantially reduces the flow of illegal immigration.

Mexico’s President Andres Manuel Lopez Obrador said early Friday that his country was “doing our job” to stop the flow of undocumented migrants to the United States, and warned Trump that hitting his neighbor with tariffs would be a lose-lose game.

But the US president only doubled down on his threats of punishment, saying in a new flurry of tweets that “Mexico has taken advantage of the United States for decades.”

The impact of new tariffs would be devastating for Mexico, which sends 80 percent of its exports to the US.

Lopez Obrador reminded his American counterpart the tariffs would also take a heavy toll on the United States, whose largest trading partner so far this year is Mexico — thanks mainly to Trump’s trade war with China.

Earlier this month Trump, angered by what he deemed unfair Chinese trade practices, Trump raised punitive duties on $200 billion in Chinese imports from 10 to 25 percent. Beijing has promised retaliation.

The Mexico tariffs would exacerbate US trade tensions, with the effects rippling across multiple economic sectors, including the automobile industry and agriculture.

“No good can come of coercive measures…. These (tariffs) would not be good for Mexicans, but they would not be good for Americans either,” said Lopez Obrador.

He said his government would act prudently, adding he had already sent a delegation to Washington for talks, led by Foreign Minister Marcelo Ebrard.

Lopez Obrador refrained from mentioning possible retaliatory measures. But Mexico’s top diplomat for North America said Thursday the country would respond “vigorously” if Trump followed through.

Trump only stepped up his Twitter attacks.

“Mexico must take back their country from the drug lords and cartels. The Tariff is about stopping drugs as well as illegals!” he fumed.

– Market turmoil –

Global markets slumped over the latest trade war threat.

On Wall Street, the Dow Jones Industrial Average was down 1.1 percent at mid-day. In Tokyo, shares closed down 1.6 percent, with losses led by automakers with operations in Mexico. European markets were also hit.

The Mexican peso lost 2.6 percent against the dollar.

The announcement came the same day Trump started the process of ratifying the new North American trade pact with Mexico and Canada, the USMCA — an agreement that now may be under threat.

Even some Republican allies warned Trump not to damage a vital trade relationship over border concerns.

“Trade policy and border security are separate issues,” Republican Senate Finance Committee chairman Chuck Grassley said in a rebuke of Trump’s plan.

“This is a misuse of presidential tariff authority and counter to congressional intent.”

Like Grassley, fellow Republican Senator Joni Ernst warned that placing new tariffs on Mexico would stifle progress on the USMCA.

“While I support the need for comprehensive border security and a permanent fix to illegal immigration, this isn’t the right path forward,” she said.

US industry groups voiced their disapproval, too, with the Business Roundtable warning Trump that unilateral imposition of tariffs “would be a grave error.”

Trump pledged in his 2016 election campaign to crack down hard on illegal immigration, but the numbers of migrants have steadily climbed.

– Clash over migrants –

The number of migrants apprehended at the US-Mexico border has topped 100,000 a month in recent months.

That included a new record of 58,474 people who crossed in family groups in April, and a single group of 1,036 people that particularly outraged Trump when it crossed into El Paso, Texas this week.

They are mostly people fleeing poverty and violence in Central America to ask for asylum once they reach US soil.

Trump has consistently demonized the migrants as criminals and gang members, and warned that illegal drugs are flowing across the border.

Lopez Obrador insisted his government is working to slow the flow.

“We are doing our job, without violating (migrants’) human rights,” said the left-wing populist, who has sought to maintain cordial relations with Trump despite the Republican billionaire’s frequent anti-Mexican outbursts.

He said his foreign minister would present officials in Washington with data showing that Mexico is taking steps “like never before” to send migrants back to their home countries or help them to stay and work in Mexico.

However, White House press secretary Sarah Sanders indicated Trump was unlikely to budge, saying the administration has “thought this through.”

Efforts at immigration reform have stalled in Congress, and Trump has been stymied by courts on some of the measures his administration has attempted.

Tapping his executive powers against a resistant Congress, Trump has also taken money from the military budget to construct sections of wall along the lengthy frontier, despite his campaign pledge that Mexico would pay for the barrier.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.