White House chief of staff Mick Mulvaney said on "Fox News Sunday" that President Trump is "deadly serious" about his threat to impose a 5% tariff on all Mexican goods crossing the border until the "illegal immigration problem is remedied," adding that he believes "American consumers will not pay for the burden of these tariffs."
"[T]hat old-fashioned economic orthodoxy doesn't work when it's relatively easy to substitute other goods. Prices from China have gone up. American consumers are going to products that are made in the United States, for example, that don't carry those tariffs. We think the same thing will happen here and American consumers will not pay for the burden of these tariffs. Secondly, there's already a price associated with illegal immigration. American taxpayers are paying hundreds of billions of dollars for illegal immigrants. They're paying hundreds of billions of dollars for the drugs that come across the southern border. So there is already a cost associated with this that we are trying to get off of the backs of ordinary Americans."
Why it matters: Mexico recently became the No. 1 trading partner with the U.S. Trump's threat to impose tariffs at a rate as high as 25% on $350 billion worth of Mexican goods would effectively amount to an $87 billion tax increase on American consumers — and would impact goods ranging from avocados to cars, as Fox's Chris Wallace notes.
- The New York Times reported Saturday that Trump overruled the objections of top White House advisers, including Jared Kushner and U.S. Trade Representative Robert Lighthizer, who argued that it could upend the president's chances of passing his NAFTA replacement.
- Mulvaney told Wallace that this is an "immigration matter, not a trade matter" — claiming that the latest tariffs and the USMCA are "not interrelated." Pressed on whether intentionally harming the Mexican economy would result in even more illegal immigration, Mulvaney admitted that that's "probably not inaccurate," but said that it's up to Mexico to help solve the problem if Congress won't act.
Go deeper: Trump's Mexico tariffs could decimate the auto industry