Mexico warns U.S. proposed tariffs could damage economy, cause influx of migrants

Mexico launched a counteroffensive Monday against the threat of U.S. tariffs, warning not only that it would hurt the economies of both countries but also could cause a quarter-million more Central Americans to migrate north.

A high-level delegation from the Mexican government held a news conference at the embassy in Washington, making the case against U.S. President Donald Trump’s threat of imposing a 5 per cent tariff on Mexican imports by June 10.

It is unclear what more Mexico can do — and what will be enough — to satisfy the president.

“As a sign of good faith, Mexico should immediately stop the flow of people and drugs through their country and to our Southern Border. They can do it if they want!” Trump tweeted Monday from London.

Trump’s Republican allies warn that tariffs on Mexican imports will hit U.S. consumers, harm the economy and jeopardize the new United States-Mexico-Canada Agreement trade pact that the White House wants Congress to approve.

WATCH: Trump doubles down on tariff threat as Mexico tries to negotiate with U.S.

1:43 Trump doubles down on tariff threat as Mexico tries to negotiate with U.S.

“This calls into question our ability to pass the USMCA, much less get it passed by Canada and Mexico,” said Sen. John Cornyn, R-Texas.

The GOP senator said he couldn’t imagine the hit to the economy if the tariffs rise to 25 per cent, as Trump has threatened. “I don’t even want to think about it,” he told reporters Monday. “We need to put our heads together and try to come up with a solution.”

Trump all but taunted negotiators for a quick resolution. “Mexico is sending a big delegation to talk about the Border,” he tweeted Sunday. “Problem is, they’ve been ‘talking’ for 25 years. We want action, not talk.”

But Mexican Foreign Minister Marcelo Ebrard replied Monday that both countries working together is “the best way to do it.”

Mexico said it will only go so far to avert the duties, and absolutely ruled out a “third safe country” agreement that would require asylum seekers to apply for refuge in Mexico first.

“There is a clear limit to what we can negotiate, and the limit is Mexican dignity,” said Mexico’s Ambassador to the United States, Martha Barcena.

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Barcena said Mexico has taken steps to offer migrants visas in Mexico, and “without Mexico’s efforts, an additional quarter-million migrants could arrive at the U.S. border in 2019.”

WATCH: Trump threatens Mexico with tariffs on imports

1:52 Trump threatens Mexico with tariffs on imports

Barcena said Mexico has accepted 8,835 returned migrants as of May 29, and they are now waiting in the country for an asylum hearing in the U.S. courts.

The tariff threat comes just as the administration has been pushing for passage of the USMCA, which would update the North American Free Trade Agreement.

U.S. Commerce Secretary Wilbur Ross met Monday with Mexican Economy Minister Graciela Marquez. Afterward, Ross said the two had discussed the tariffs and the “next steps” for the trade pact. “I reiterated the president’s message that Mexico needs to do more to help the U.S. address immigration across our shared border,” Ross said in a statement.

Delegations led by Secretary of State Mike Pompeo and Foreign Relations Secretary Marcelo Ebrard will also meet in Washington.

Marquez told reporters her team is assessing potential reprisals in case the diplomatic efforts do not bear fruit this week. “We will have to make a strategic plan to take into consideration many elements,” she said.

Agricultural trade between the United States and Mexico was worth about $130 million a day last year, according to Mexican Secretary of Agriculture Victor Villalobos. A 5% U.S. tariff would decrease that trade by $3.8 million a day, he said.

Trump has been here before, issuing high-stakes threats, only to back off come crunch time.

Trump claims Mexico has taken advantage of the United States for decades but that the abuse will end when he slaps tariffs on Mexican imports. His frustration with the flow of migrants is nothing new, but it’s a subject he often returns to, as he did last week after special counsel Robert Mueller’s rare public statement on the Trump-Russia report.

WATCH: Freeland says they won’t ratify CUSMA until Mexico and U.S. are ready

1:49 Freeland says they won’t ratify CUSMA until Mexico and U.S. are ready

The president said last week that he will impose the tariffs to pressure the government of Andres Manuel Lopez Obrador to block Central American migrants from crossing the border into the U.S. Trump said the import tax will increase by 5 per cent every month through October, topping out at 25 per cent. It swiftly refocused attention on the border issues.

Mick Mulvaney, the acting White House chief of staff, said on “Fox News Sunday” that the president is “deadly serious.”

Still, Mulvaney acknowledged there are no concrete benchmarks being set to assess whether the U.S. ally is stemming the migrant flow enough to satisfy the administration. “We intentionally left the declaration sort of ad hoc,” he said.

“So, there’s no specific target, there’s no specific percentage, but things have to get better,” Mulvaney said. “They have to get dramatically better and they have to get better quickly.”

GOP Sen. John Kennedy of Louisiana, called the tariffs a “mistake” and said it was unlikely Trump would impose them.

Republicans on Capitol Hill and GOP allies in the business community have expressed serious unease with the tariffs. Some see this latest threat as a play for leverage and doubt Trump will follow through. Earlier this year, Trump threated to seal the border with Mexico only to change course.

Florida GOP Sen. Marco Rubio tweeted that the situation at the border was “unsustainable.” But he said he was “hopeful this can be resolved” without Trump using his authority to impose tariffs.

Republicans have repeatedly tried to nudge Trump away from trade wars and have specifically questioned the White House’s ability to rely on executive authorities to impose some of them as national security issues.

WATCH: Mexico president says they’ll respond ‘prudently’ to Trump tariff threats, says up to senate to ratify USMCA

2:48 Mexico president says they’ll respond ‘prudently’ to Trump tariff threats, says up to senate to ratify USMCA

At the same time, Trump’s efforts to revamp immigration laws have drawn little support in the Congress.

“I think what the president said, what the White House has made clear, is we need a vast reduction in the numbers crossing,” Kevin McAleenan, acting secretary of the Department of Homeland Security, said on CNN’s “State of the Union.”

Mulvaney, who also appeared on NBC’s “Meet the Press,” said Mexico could take various steps to decrease the record numbers of migrants at the border.

He suggested the Mexican government could seal its southern border with Guatemala, crack down on domestic terrorist organizations and make Mexico a safe place for migrants seeking to apply for asylum.

Economists and business groups are sounding alarms over the tariffs, warning that they will impair trade and increase the costs of many Mexican goods that Americans have come to rely on.

But Mulvaney played down those fears, saying he doubts business will pass on the costs to shoppers. “American consumers will not pay for the burden of these tariffs,” he said.