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Three reasons US tariffs on Mexico would not curb illegal immigration

Image credit: Jonathan McIntosh (Creative Commons: Flickr)

After over a week of uncertainty and a twelve hour meeting at the US State Department, Mexico and the US have finally reached an agreement to curb immigration and avert punitive US tariffs on Mexican exports. Earlier this month, President Trump insisted that Mexico was not doing enough to tackle immigration flows. In retaliation, he threatened to impose a 5 per cent duty on all Mexican goods that would rise by 5 per cent every month until it reached 25 per cent in October. Tariffs would stay at that level “unless and until Mexico substantially stops the illegal inflow of aliens through its territory”, President Trump tweeted.

The proposed tariffs were opposed on multiple fronts including US business groups, the highly influential US Chamber of Commerce and Senate Republicans. They also came at a crucial time in North American trade as the approval of a deal to revamp the North American Free Trade Agreement (NAFTA) is still pending.

Just three days before the tariffs were scheduled to begin, President Trump tweeted that the tariffs are now “indefinitely suspended”. While it appears, in the short-term at least, that the tariffs have been shelved, Trump’s political gamble threatened to destabilise Mexico, punish US consumers with higher prices and undermine a wide variety of his own political objectives. More than anything, a 25 per cent tariff on Mexican exports could have easily resulted in higher, not lower, levels of illegal immigration. Here are three reasons why Trump’s tariffs would not have stopped illegal immigration from Mexico.

1. Tariffs would cause serious economic instability in Mexico

Approximately 80 per cent of Mexico’s exports go to the US and imposing a 25 per cent tariff would have made this trade unprofitable. To show an example of a similar situation, the US currently has a 25 per cent tariff on pickup trucks, which has resulted in only 0.23 per cent of US pickups being foreign-made. In reaction, Mexican exporters would have needed to search for new markets and US importers would have paid the cost of these new tariffs.

Damage to US-Mexico trade could also lead to mass-layoffs in Mexico, particularly in the northern states. It is likely that the Mexicans that are unemployed due to Trump’s tariffs would have looked to the US for work, increasing levels of illegal immigration. The number of Mexicans immigrating to the US for work has remained flat for almost a decade, in part because of the success of the original NAFTA deal.

Despite an initial increase in illegal immigration after the agreement’s implementation, the illegal population from Mexico has fallen by 1.5 million. This means that more Mexicans are now leaving the US than entering it. If Trump had implemented these tariffs, there was a real possibility that these immigration trends would have reversed. Furthermore, any reduction in Mexico’s financial stability also reduces the Mexican government’s ability to tackle illegal immigration through its borders.

2. The threat of the Mexico closing border will keep illegal immigration high

In normal years, illegal immigration slows in the summer months as temperatures reach dangerous levels. Statistics show that apprehensions fall, on average, 24 per cent from May to July. However, if Central Americans believed that Mexico might suddenly close the Guatemala-Mexico border, it is likely that they would come to the border regardless of the additional risks, undoing the seasonal pattern of illegal immigration. Immigrants do react to the threat of border closures. For example, in late 2016, Trump’s election caused immigrants to rush to the border in fear that Trump would end asylum. Similarly, Trump’s threat in October to close the border led a higher level of illegal immigration during that period.

With a more effective transportation network now, it is entirely possible that the threat of Trump’s tariffs could have broken the seasonal pattern of migration and kept illegal immigration higher than it would have otherwise been.

3. Mexico cannot stop the flow of migrants from Central America

Yet the number one reason that tariffs would not have stopped illegal immigration from Mexico is that Mexico itself cannot staunch the flow of people from its neighbours to the south. It is not just Trump who wants the Mexican government to commit to greater action on immigration. Mexicans themselves are increasingly disgruntled about the rising number of desperate migrants on their roads and in their communities. But there is little that Mexican President Lopez Obrador can do, especially in the short term.

His government has apprehended 692,476 Central Americans, stopped fast-tracking humanitarian visas for Central Americans travelling to Mexico, stepped up deportations to more than 50,000 so far this year. It has even attempted to set up a migrant “containment” belt with federal forces in order to intercept migrants trying to reach legal U.S. ports of entry. Yet the women, children and men keep coming.

Mexico’s immigration bureaucracies are already working well above capacity. Its National Migration Institute has had its budget cut and the tiny Mexican Commission for Refugee Assistance, which handles asylum cases, was unable to process even a quarter of the 30,000 applications it received last year. With numbers set to double, these agencies are completely overwhelmed.

By forcing the problem of illegal immigration onto Mexico, the US is asking a country with far fewer resources and much less capacity to deal with an issue that it admits it cannot handle itself. The US is pushing Mexico to sign onto a safe third party agreement which would designate Mexico a safe space for migrants, even though it clearly is not. It would also free the US from Central American asylum claims and force Mexico to deal with hundreds of thousands of refugees. The ensuing humanitarian crisis would likely send Mexico’s economy into recession, if not full-blown crisis. If that happens, more migrants will head to the US, as Mexicans join Central Americans.

It was never a sure bet that these tariffs would actually be implemented: Trump has repeatedly announced dramatic changes to trade policy and then subsequently abandoned, postponed, or watered down their implementation. However, the threat of the tariffs was able to force Mexico to make a number of concessions regarding border security, including that it would deploy its national guard to its southern border with Guatemala to help stem migration from Central America. Ultimately, Trump’s actions in the Mexico-US trade saga are a clear indication that he plans to continue his tactic of using tariffs as a political weapon in international negotiations.

Rose Iles Fealy is the Latin America Fellow for Young Australians in International Affairs.

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