Donald Trump hitting Mexico with 5% tariff in response to migrants

US President Donald Trump. Photo / AP

In a surprise announcement that could compromise a major trade deal, President Donald Trump announced Thursday that he is slapping a 5 per cent tariff on all Mexican imports to pressure the country to do more to crack down on the surge of Central American migrants trying to cross the border.

He said the percentage will gradually increase "until the Illegal Immigration problem is remedied."

Trump made the announcement by tweet after telling reporters earlier Thursday that he was planning "a major statement" that would be his "biggest" so far on the border.

"On June 10th, the United States will impose a 5 per cent 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," he wrote, "at which time the Tariffs will be removed."

Trump has accused the Mexican government of failing to do enough to crack down on the surge of Central American migrants who have been flowing to the US in search of asylum from countries including El Salvador, Honduras and Guatemala.

The announcement comes as the administration has been pushing for passage of the United States-Mexico-Canada Agreement that would update the North American Free Trade Agreement.

The White House said Trump would be using the International Emergency Economic Powers Act to implement the tariff.

"If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed," the White House said in a statement.

But if Trump is not satisfied, the 5 per cent figure will increase to 10 per cent on July 1, to 15 per cent on August 1, to 20 per cent on September 1 and to 25 per cent on October 1.

"Tariffs will permanently remain at the 25 per cent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory," the statement read.

During a visit to Canada on Thursday, Vice President Mike Pence vowed the deal would be passed this year.

"Our administration is working earnestly with leaders in the Congress of the United States to approve the USMCA this summer," he said. Asked by reporters about the new tariff consideration, Pence said that both Mexico and Congress need to do more and that Trump is determined to use his authority to call on them to do so.

Trump had said Thursday morning that he was planning "a major statement on the border" later Thursday or Friday that would be his "biggest statement, so far, on the border."

"This is a big-league statement. But we are going to do something very dramatic on the border, because people are coming into our country — the Democrats will not give us laws," he said as he headed to a commencement speech for 2019 United States Air Force Academy graduates.

- AP