Markets are lower Friday morning after U.S. President Donald Trump said in a Tweet Thursday evening his administration will impose a 5-percent tariff on every Mexican good crossing border as of June 10.
Trump's 5-percent tariff will be lifted to 25 percent over the coming months unless the Mexican government takes action to "reduce or eliminate the number of illegal aliens" entering the U.S. from Mexico's side of the border. Trump also said the tariffs will stay in place until the illegal immigration "problem is remedied."
Why It's Important
The U.S. imported $346.5 billion worth of goods from Mexico throughout 2018 which represented 13.6 percent of total imports, according to CNBC. Among the more notable sectors, the auto industry imports billions of dollars worth of autos and auto parts.
Deutsche Bank analysts estimate General Motors Company GM imports 29 percent of the total parts for its cars and trucks from south of the border. Fiat Chrysler Automobiles NV FCAU's exposure is slightly less at 24 percent, followed by Ford Motor Company F at 17 percent.
Shares of GM and Fiat Chrysler were each lower by around 5.4 percent ahead of Friday's market open, while Ford's stock was lower by 4.2 percent.
If Trump isn't satisfied with the Mexican government's progress in curbing illegal immigration, the tariffs will be lifted to 10 percent on July 1. The tariffs will be lifted by an incremental 5 percent afterward on Aug. 1, Sept. 1 and Oct. 1.
"Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory," the White House said.
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