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U.S. Suspends Imposition of Import Tariffs on Mexico

President Trump has announced that the five percent tariff scheduled to be imposed 10 June on all imports from Mexico has been “indefinitely suspended” in light of a bi-lateral agreement to work toward a “durable solution” on “irregular migration” from Mexico to the United States. The two sides said they would “continue their discussions on the terms of additional understandings,” which will be “completed and announced within 90 days, if necessary.”

As previously reported, the president had threatened to invoke the authorities of the International Emergency Economic Powers Act of 1977 to initially impose a five percent tariff on imports from Mexico and increase that tariff to 10 percent on 1 July, 15 percent on 1 August, 20 percent on 1 September and 25 percent on 1 October if Mexico did not take action to “dramatically reduce or eliminate the number of illegal aliens crossing its territory into the United States.” The IEEPA has previously been utilised to freeze or block assets of foreign governments or nationals but never to impose tariffs in this fashion.

The tariffs were strongly opposed by the U.S. business community and lawmakers on both sides of the aisle. For example, Senate Finance Committee Chairman Chuck Grassley (Republican-Iowa) said the tariffs would be “a misuse of presidential tariff authority and counter to congressional intent”, while Senate Finance Ranking Member Ron Wyden (Democrat-Oregon) added that the tariffs would be “paid by American consumers” and that retaliation from Mexico would harm American workers. Moreover, House Ways and Means Committee Chairman Richard Neal (Democrat-Massachusetts) vowed to introduce a resolution of disapproval if Trump declared a national emergency to justify the tariffs.

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