Update 2 : some borderline apocalyptic observations from Bloomberg markets live managing editor, Mark Cudmore who writes the following:

This Mexico tariff news is far worse than even the initial market reaction makes it out to be. The timing is almost immediate. Chaos for both companies and bureaucrats. No time for anyone to prepare or make contingencies. The only way the S&P 500 doesn't sink massively today is if Trump rows back on this. The U.S. imported almost $350b worth of goods from Mexico in 2018. What makes it even worse again, if possible, is that so many traders were hoping Trump would soon take a more conciliatory trade zone because U.S. stocks have weakened. This is a black swan event for markets and people aren't even registering. Maybe traders are all hoping there's some mistake or that this won't be implemented.

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Update 1 : it's going from bad to worse, with the White House warning that it will hike Mexico tariffs to 25% by October 1, if the border crisis persists, as Trump is activating a scorched earth approach whereby he will "punish" any offshore nation that he believes is transgressing, by imposing tariffs.

Meanwhile, moments after Trump's shock tweet, the Mexican deputy foreign minister Seade said that if President's threat to impose tariffs is carried out, "it would be disastrous", and Mexico would "respond strongly", adding that "we will not remain with out arms folded" before the tariff deadline "to see if it is serious."

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Following an earlier leaked story from the Wall Street Journal, President Trump has confirmed that he will impose tariffs on Mexico until the illegal immigration problems at the southern US border are fixed.

Amid negotations and escalations in the process of moving USMCA through Congress, Trump has decided to go after one on America's closest trade partners: "On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed. Details from the White House to follow."

On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,.. — Donald J. Trump (@realDonaldTrump) May 30, 2019

....at which time the Tariffs will be removed. Details from the White House to follow. — Donald J. Trump (@realDonaldTrump) May 30, 2019

The reaction in markets was swift. Futures slumped...

And the peso plunged...

And Treasury yields tumbled, with 5Y back below 2.00%...

Collapsing the curve into further inversion (3m10Y now -19.7bps)...

So it appears 'Tariff Man' is true to his word - imposing arbitrary tariffs on anyone and everyone until he gets what he wants to Make America Great Again.