Stocks fell on Wall Street after President Donald Trump surprised investors with tariffs on Mexican imports.
President Donald Trump doubled down Friday on his threat to slap a 5% tariff on Mexican imports unless America’s southern neighbor cracks down on Central American migrants trying to cross the U.S. border.
The stock market’s tumble on Friday all but guarantees that May will be the first monthly loss for the market in 2019. As of 4:30 PM, the NASDAQ was down over 110 points while the DJIA fell over 350 points.
The news hit automakers particularly hard. Many of them import vehicles into the U.S. from Mexico.
GM stock was down 4.25% while Ford slid down over 2.25%, but not all Michigan companies saw a fall in stock prices today, Kellogg and DTE Energy were up about 1%.
“Imposing tariffs on goods from Mexico is exactly the wrong move,” said Neil Bradley, executive vice president of the U.S. Chamber of Commerce, which is exploring legal action in response to the tariffs.
The economic impact for Mexico was swift, with the peso dropping more than 3% against the U.S. dollar Friday morning.
Mexican President Andrés Manuel López Obrador dispatched his foreign secretary to Washington to try to negotiate a solution.
Trump said the tariff percentage will gradually increase up to 25% until the migration problem is remedied.
Texas Republican Sen. John Cornyn supports the president’s commitment to securing the border, an aide said, but he opposes the across-the-board tariff, “which will disproportionately hurt Texas.”
Pennsylvania GOP Sen. Pat Toomey, who has questioned the administration’s ability to invoke national security threats for some other imports, called the tariffs a “blanket tax increase” on items Americans purchases from Mexico and “the wrong remedy.”
The latest actions by the administration also threaten the future of the USMCA trade deal between the U.S., Mexico and Canada. The contentiuous agreement negotiated as a replacement for the North American Free Trade Agreement is one of the Trump administration’s most touted achievements.