What’s happening: President Trump announced the United States would impose a 5 percent tariff on all goods coming into the country from Mexico starting June 10, “until the Illegal Immigration problem is remedied.” The tariffs would increase to as much as 25 percent in the months that follow.

If the tariffs are put into effect, companies importing products from Mexico would pay an additional tax. Last year the United States imported nearly $350 billion in goods from Mexico. The impact of the tariffs could be felt in a wide number of industries, including automobile manufacturing, electronics and produce.

Why there’s debate: Proponents of the plan see it as a strong method of compelling Mexico to address immigration. Any economic impact the tariffs have is worthwhile, they argue, if it leads to changes that alleviate issues at the southern border.

Economists warn that tariffs often lead to higher prices, meaning the bulk of the cost would ultimately be paid by American consumers. The head of a U.S. manufacturers association said the tariffs would have “devastating consequences.”

Others argue that the ongoing trade war with China shows that Trump doesn’t understand the basic facts of how tariffs work, mistakenly thinking the other country foots the bill.

What’s next: Mexican President Andrés Manuel López Obrador has indicated his government may be willing to make some concessions to avoid the tariffs. Acting White House chief of staff Mick Mulvaney says Trump is “deadly serious” about his plan and called tariffs on Mexico one of the “extraordinary tools” to stop the increased flow of border crossings. Republicans in the Senate are reportedly considering taking legislative action to stop the tariffs, a move Trump said would be “foolish.”

Officials from both countries are scheduled to discuss the issue in Washington on Wednesday, five days before the tariffs are set to kick in.

Perspectives

American consumers will pay the price for the tariffs

“The Trump administration’s newly imposed import tariffs will be felt most sharply by a group that the President is loath to alienate: ordinary, working American households.” — Rey Mashayekhi, Fortune. Read more

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