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Mexican Foreign Minister Marcelo Ebrard tweeted Friday afternoon that a meeting to resolve the dispute between the United States and Mexico will take place Wednesday in Washington.
Ebrard said that he will lead the Mexican side and that his U.S. counterpart, Mike Pompeo, will lead the US delegation.
The Dow fell 355 points, or 1.4%, on Friday as investors agonized over President Trump’s threat to impose escalating tariffs on Mexico.
The S&P 500 lost 1.3%, while the Nasdaq fell 1.5%. The selloff capped the Dow’s sixth-straight losing week, the longest slump since June 2011. The Dow finished below 25,000 for the first time in four months.
The Dow and S&P 500 declined nearly 7% apiece in May, their first losing months since December. The Nasdaq tumbled 8% on the month, its worst May since 2010.
Why this matters: Trump’s vow to impose tariffs on Mexico surprised investors, driving shares of auto companies, beer makers and apparel companies sharply lower. General Motors declined 4%, Corona maker Constellation Brands dropped 6% and Levi Straus lost 7%.
US oil prices plunged 5.5% to a three-month low of $53.50 a barrel, reflecting fear about the economic impact of the tariffs on China and Mexico. Crude tumbled 16% in May, snapping a four-month winning streak.
Investors fled to the safety of US government debt, driving the 10-year Treasury yield to 2.13%, the lowest level in nearly two years.
The Mexican peso declined 2.4% against the US dollar, while ETF that track Mexican stocks plunged 4%.
House Speaker Nancy Pelosi said President Trump is “sowing chaos” with his new threat of tariffs on Mexico.
“Yet again, the President is sowing chaos over the border instead of delivering solutions for American workers and for American consumers,” Pelosi wrote in a statement a day after the announcement of the new possible tariffs.
Read Pelosi’s full statement:
Mexican Foreign Minister Marcelo Ebrard tweeted Friday that he just spoke with White House senior adviser Jared Kushner and Secretary of State Mike Pompeo.
Ebrard said the call happened before he boarded a flight to Washington.
The US footwear industry’s largest trade association said it is “deeply concerned” about President Trump’s continued use of tariffs as a “political weapon.”
In a statement, Matt Priest, president and CEO of Footwear Distributors and Retailers of America, said that it “does not make sense to impose massive tax increases on hardworking American individuals and families as a bargaining chip for negotiating with Mexico or China.”
Priest went on to say that Trump’s most recent announcement threatens to “further harm US footwear consumers and companies.”
Abby Maxman, president of Oxfam America, issued a statement in response to President Trump’s announcement of new tariffs on Mexico.
Trump threatened to raise tariffs on all goods by 5% starting June 10, if Mexico did not curb the immigration problem plaguing both nations.
Here’s what Maxman said:
The National Retail Federation issued a strong rebuke of President Trump’s plan to impose tariffs on Mexican imports.
NRF said US retailers imported $128 billion in goods from Mexico in 2017 and added that proposed tariffs “won’t help move USMCA forward.”
China’s retaliatory tariffs on some $60 billion worth of US exports has just officially gone into effect as of 12 p.m. ET.
Beijing said earlier this month that it would increase tariffs on roughly $60 billion worth of US goods on June 1, including American cotton, machinery, grains and aircraft parts.
More than 4,000 items are affected, most of which will carry tariffs of 25% — up from 10% when they were first levied last September.
Some background: The move follows increase in US tariffs on $200 billion worth of Chinese exports from 10% to 25%, which went into effect May 10. The Trump administration, which has accused China of backtracking on previous trade commitments, sought to turn up the pressure on Beijing after months of talks failed to produce a breakthrough. But so far, the tit-for-tat penalties have not pushed Beijing toward a deal.
The costs of any tariff imposed on Mexico will ultimately be passed along to American consumers. (Remember: Tariffs are paid by importers, not by exporting countries.)
So what does that mean? Tariffs will affect the supply chain for …
And it’s a two-way street. Americans sold just shy of $300 billion in goods to Mexico in 2018 — cars, machinery, pork and beef. Billions and billions dollars worth of many different type of goods that might be subject to retaliatory tariffs from Mexico.
Mexico’s President Andrés Manuel López Obrador, in response to President Trump’s threat to impose tariffs on Mexico, said social problems cannot be resolved with “coercive measures.”
He added that the “Statue of Liberty is not an empty symbol,” in an open letter to President Trump.
Trump has threatened to impose tariffs on Mexico unless it steps up its immigration enforcement actions.
President López Obrador (also known by his initials AMLO) asked how the United States could “overnight” transform from a country signifying hope for migrants to a “ghetto” where they are “stripped of their rights.”
Here’s his letter:
White House officials held a call yesterday morning to discuss President Trump’s decision to move forward with his threat of tariffs on all imported goods from Mexico if the country doesn’t stop the flow of migrants across the southern border.
Trump had been privately advised against the idea from more cautious members of his team, including Treasury Secretary Mnuchin, while others, like Peter Navarro, told him the dramatic move would get Mexico’s attention. It’s clear who Trump sided with.
About the timing: During the call, officials decided to announce the move Thursday night — instead of preparing a smoother, more calculated rollout — because they didn’t want any more details to leak to reporters.
That rollout hasn’t gone as smoothly as officials had hoped. They have gotten an earful from Republican lawmakers who have expressed alarm at the decision, with some urging the President to reconsider. Sen. Chuck Grassley’s statement criticizing the decision has been widely discussed inside the West Wing this morning, but Trump has shown no sign of backing off his threat.
Senate majority leader Mitch McConnell is walking a tightrope when it comes to Trump’s tariff threat.
He is pointing the finger at Democrats for the “crisis at our southern border” — but also not taking a strong position on the tariff plan.
Here’s the Republican leader’s statement:
President Trump threatened on Thursday to impose new tariffs on Mexico if the country does not step up its immigration enforcement actions, combining his boiling border-related frustrations with his preferred method of punishing foreign countries.
Here’s how it would work, according to a White House statement:
The statement said Trump would carry out his threat under authority from the International Emergency Economic Powers Act and that he would lift tariffs only “if the illegal migration crisis is alleviated through effective actions taken by Mexico.”
President Trump has repeatedly tweeted about his threats to implement new tariffs on Mexico over immigrations.
His most recent tweet he predicted that companies will leave Mexico because of the tariffs. He also claimed they’ll stop drugs:
Earlier today, he demanded that Mexico “finally do what must be done” on immigration:
But he blamed Democrats before that. Earlier this morning, Trump tweeted that Democrats could “solve the problem” at the border with a “quick and easy fix.”
White House press secretary Sarah Sanders dismissed any legal concerns with the President’s tariffs announcement.
Asked if there are concerns the action will get tied up in court, Sanders said:
For context: IEEPA is the International Emergency Economic Powers Act, which authorizes the President to regulate commerce after declaring a national emergency.
She continued, “This is a measured response to the authority that he has, there’s case law that supports it from precedent where this has been done in the past. And again, the President’s going to fulfill his duty, it would be nice if Congress would fulfill theirs.”
However: As CNN reported yesterday, privately, officials have conceded it’s not clear the White House has the legal authority to impose tariffs on this scale. They are concerned that, because of the scope, the mandate will potentially face legal challenges that could leave it tied up in the courts before June 10 even gets here.
Volkswagen, the world’s largest carmaker, warned on Friday that tariffs imposed on Mexico could hurt U.S. consumers and threaten jobs growth.
Volkswagen said it has made significant long-term investments in the United States “that would be impaired by restrictive changes to trade.”
The company said it remains hopeful that the issue will be resolved “through constructive negotiations without the imposition of tariffs.”
Remember: Mexico is a regional manufacturing hub for global automakers that assemble cars in Mexico and ship many of them to the United States.
Volkswagen shares are down almost 3% in Europe. Among the biggest fallers are Mazda and Nissan in Japan which plunged 7% and 5% respectively. In the US, Ford shares are down 3% and GM dropping more than 4%.
President Trump and Mexican President Andrés Manuel López Obrador have not spoken directly since Trump announced tariffs on Mexico on Thursday in retaliation for the influx of migrants trying to cross into the US from the southern border, White House press secretary Sarah Sanders said Friday
She added that the Trump administration’s “teams will continue to work” with Mexico on the issue.
The trade group representing Ford and General Motors, the American Automotive Policy Council, says tariffs against Mexico will hurt US companies.
Why this matters: Every American auto factory depends on Mexican parts to build its cars or trucks. President Trump’s threat to impose tariffs on Mexican imports could raise costs in the United States by tens of billions of dollars in the auto industry alone.
CNN Business’s Chris Isidore contributed reporting
Mexican President Andres Manuel Lopez Obrador is calling for prudence and dialogue in response to Trump’s threats to slap Mexico with tariffs in the upcoming months.
He said that the situation should be rectified because the measures “would not benefit Mexicans, but it would not benefit Americans either.”
