In the past year, trade relations between the United States and China have continued to be under pressure due to higher rates imposed by the Trump administration. President Trump is now shifting his attention to Mexico, one of the most important trading partners of the US and consumer groups are concerned.
On Thursday, Trump announced that he plans to impose a 5 percent rate on all imported goods from Mexico as a direct response to the number of unauthorized immigrants arriving through the southern border in the United States. The tax starts on June 10 and is increased every month to a maximum of 25 percent in October, unless Mexico finds a way to discourage illegal migration across the southern US border.
In Friday's rulings, top technology, lobbying and advocacy groups argued that these new rates were inappropriate and could lead Mexico to impose its own rates on the US as retribution, with serious consequences for the industry if the situation escalates.
"This is potentially devastating for American small businesses and all the people they employ," said Gary Shapiro, president and CEO of the Consumer Technology Association (CTA) in a statement. "This is a short-sighted, shortest possible response that does not recognize a fundamental economic fact: rates are taxes." The CTA sponsors consumer technology events, including the annual Consumer Electronics Show (CES).
These new rates on Mexico piggyback from the ongoing trade war between the Trump and China. Earlier this month Reuters reported that $ 300 billion worth of Chinese goods such as cell phones and laptops would be subject to new rates. Because of this, some companies, like GoPro, recently announced that they will relocate production from China to Mexico. Mexico has emerged as one of the most important US export markets, alongside China and Canada. According to the CTA, the US exported $ 41 billion worth of consumer products to the country in 2017 alone.
GoPro declined to comment.
"Rates are not a suitable tool to tackle serious immigration problems," said Jason Oxman, CEO and president of the Information Technology Industry Council (ITI) in a statement. "The most effective way to alleviate these concerns is that the administration and Congress pass on a permanent solution to restore the broken and outdated immigration system of the United States."
These new rates have been announced shortly after Trump disrupted conversations with House Democrats on the agreement between the United States and Mexico-Canada (USMCA), a new trade agreement that the government has proposed to replace the North American Free Trade Agreement (NAFTA). On Thursday, Trump imposed a 30-day time limit for conversations to change the bill, putting pressure on democrats, such as landlord Nancy Pelosi (D-CA), to continue.
It was this bill that technical groups such as the Computer and Communications Industry Association (CCIA) have called today in rulings. A new trade agreement and legislation to change the US immigration system were some of the option groups that put pressure on the administration to continue.
"The blunt tool of tariffs will harm American consumers and industries and jeopardize the full realization of the benefits of a modern trade agreement bringing the North American market into the 21st century," said CC Black Chairman and CEO from CCIA.