Tariffs Won ’t Stop Illegal Immigration and Could Backfire

President Trump  announced that starting on June 10, the administration will impose a 5 percent tariff on all Mexican imports “until Mexico substantially stops the illegal inflow of aliens coming through its territory.” This tariff would escalate by 5 percent per month to an astonishing 25 percent “permanently” by O ctober 1. This idea is a terrible policy. Itwill punish U.S. consumers with higher prices, and it could easily result in more illegal immigration.Tariffs will undermine the Mexican economy and lead to more illegal immigration from Mexico.Mexico ’s exports—$195 billion to the United States—account for 38 percent of its GDP. Imposing a 25 percent tariff would make trade with Mexico unprofitable. For context, the U.S. currently has a 25 percent tariff on pickup trucks which virtually bans foreign-made pickups, as only 0.23 percent of U.S. pickups are foreign-made. An end to U.S.-Mexico trade would trigger mass layoffs in Mexico—particularly in northern Mexico. Consequentially, the Mexicans that are unemployed due to Trump’s tariffs would look to the United States for work, increasing illegal immigration and exacerbating the very problem Trump aims to ameliorate.Indeed, President Trump is so focused on stopping immigration from Central America, which has now overtaken Mexican illegal immigration, that he has forgotten that for nearly a century, Mexicans dominated those flows. A 5 percent tariff by itself would be  more than double the pre-Nor...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs