Over the past year, trade relations between the United States and China have continued to strain under increased tariffs imposed by the Trump administration. Now, President Trump is shifting his focus toward Mexico, another of the US’s top trade partners, and consumer tech groups are worried.
On Thursday, Trump announced that he plans to impose a 5 percent tariff on all imported goods from Mexico as a direct response to the number of unauthorized immigrants who are arriving in the United States via the southern border. The tax will go into effect on June 10th and increase each month, reaching a maximum of 25 percent in October, unless Mexico finds a way to deter illegal migration across the US southern border.
In statements on Friday, top tech industry, lobbying, and advocacy groups argued that these new tariffs were inappropriate and could lead to Mexico imposing its own tariffs on the US in retaliation, with serious consequences for the industry if the situation escalates.
“This is potentially devastating to American small businesses and all the people they employ,” Gary Shapiro, president and CEO of the Consumer Technology Association (CTA), said in a statement. “This is a short-sighted, short-tempered reaction that doesn’t recognize a basic economic fact – tariffs are taxes.” The CTA sponsors consumer tech events, including its annual Consumer Electronics Show (CES).
These new tariffs on Mexico piggyback off of the Trump administration’s ongoing trade war with China. Earlier this month, Reuters reported that $300 billion worth of Chinese goods like cellphones and laptops would be subject to new tariffs. Because of this, some companies, like GoPro, recently announced that they will move production from China to Mexico. Mexico has emerged as one of the US’s top export markets, alongside China and Canada. According to the CTA, the US exported $41 billion worth of consumer tech goods to the country in 2017 alone.
GoPro declined to comment.
“Tariffs are not an appropriate tool to address serious immigration challenges,” Jason Oxman, CEO and president of the Information Technology Industry Council (ITI), said in a statement. “The most effective way to address these concerns is for the administration and Congress to pass a permanent solution to fix the United States’ broken and outdated immigration system.”
These new tariffs were announced shortly after Trump disrupted talks with House Democrats over the United States-Mexico-Canada Agreement (USMCA), a new trade agreement the administration has proposed to replace the North American Free Trade Agreement (NAFTA). On Thursday, Trump imposed a 30-day time limit on talks to amend the bill, pressuring Democrats, like House Speaker Nancy Pelosi (D-CA), to move ahead with it.
It was this bill that tech groups like the Computer and Communications Industry Association (CCIA) invoked today in statements. A new trade agreement and legislation to change the US’s immigration system were some of the options groups pressured the administration to pursue.
“The blunt tool of tariffs will harm American consumers and industries, and risks the full realization of the benefits of a modern trade agreement that brings the North American market into the 21st century,” CCIA president and CEO Ed Black said.