WASHINGTON — The Trump administration has put aside its plan to levy tariffs on all goods imported from Mexico, prompting a collective sigh of relief from representatives of the auto and auto aftermarket industries.
President Trump announced May 30 that the U.S. would place a 5 percent tariff on Mexican goods beginning June 10, then increase those tariffs by 5 percent every month to a maximum of 25 percent unless the Mexican government took strong actions to stop migrants from entering the U.S. illegally.
"For decades, the United States has suffered the severe and dangerous consequences of illegal immigration," Mr. Trump said in a May 30 statement on the White House website. "From a safety, national security, military, economic, and humanitarian standpoint, we cannot allow this grave disaster to continue."
After a week of intense negotiations, the Mexican and U.S. governments issued a joint declaration late on June 7, announcing new initiatives to prevent migrants from Central America and Mexico from crossing into the U.S. illegally from Mexico.
"Mexico will take unprecedented steps to increase enforcement to curb irregular migration, to include the deployment of its National Guard throughout Mexico, giving priority to its southern border," the declaration said.
Mexico will take "decisive action" to dismantle human smuggling and trafficking organizations, according to the declaration. It also will coordinate with the U.S. to strengthen bilateral cooperation in securing their common border, it said.
The U.S., meanwhile, will expand implementation of the existing Migrant Protection Protocols, which calls for migrants crossing into the U.S. from Mexico will be returned to Mexico to await decisions on their asylum claims, according to the declaration.
Also, the U.S. and Mexico will continue discussions on possible further actions to address illegal immigration over the next 90 days, it said.
Mr. Trump, while declaring the agreement a victory in his war against illegal immigration, reserved the right to impose the tariffs later if he is dissatisfied with Mexico's progress in stemming the flow of immigrants.
Members of Congress and business interests alike reacted with dismay to the original announcement of the tariffs. A typical reaction came from the Motor & Equipment Manufacturers Association (MEMA), which said May 30 that tariffs on Mexican goods would not create a more secure border.
Instead, such tariffs "will only serve as an additional tax on the American people by increasing the cost of goods and putting jobs and investment in the U.S. at risk," MEMA said.
Motor vehicle parts trade between the U.S. and Mexico totaled $165 billion in 2018, equivalent to $452 million per day, according to the association.
On June 7, MEMA issued a statement applauding Mr. Trump's decision not to impose the tariffs.
"We are pleased that he heard the motor vehicle parts supplier industry, which represents the largest sector of manufacturing jobs in the U.S.," the association said.
"MEMA and its member companies urge Congress and the administration to redouble its efforts to address immigration and the crisis at our border with Mexico," it said.
The Auto Care Association (ACA) and the Alliance of Automobile Manufacturers (AAM) also said they were pleased with the administration's reversal on tariffs.
"U.S. companies benefit from having largely duty-free access to Mexico's labor market for certain important steps along the supply chain," ACA President and CEO Bill Hanvey said. "A new tariff would have resulted in higher prices for U.S. consumers and job losses for U.S. businesses."
David Schwietert, interim president and CEO of the AAM, commented along similar lines.
"Any barrier to the flow of commerce across the U.S.-Mexico border would have a cascading effect — harming U.S. consumers, threatening American jobs and investment and curtailing the economic progress that the administration is working to reignite," Mr. Schwietert said.