If President Trump’s 5% tariff on Mexican goods takes effect later this month, his trade policies would constitute a bigger tax hike than Bill Clinton’s in 1993.
Tariffs already in place against Mexico will increase revenues by $69 billion, the Tax Foundation estimates — or about 0.32% of GDP.
Add in the threatened 5% tax on Mexican imports, and that rises to about 0.40% of GDP.
That’s more than Clinton’s tax bill in 1993, which brought in revenues of about 0.36% of GDP after the first year, and just shy of George H.W. Bush’s increase in 1990, which amounted to 0.41% of GDP after year one.
If Trump follows through on his threats — 25% on all Chinese and Mexican imports — those revenues would amount to 1.45% of GDP.
You’d have to go back to the 1968 tax hike for a bigger revenue measure, per data compiled by the Treasury Department.
Mexico is America’s strongest trading partner, followed by Canada and China.
The two nations traded an estimated $671 billion worth of goods in 2018 according to the Office of the United States Trade Representative.
- Cars and auto parts: A significant portion of trade between the U.S. and Mexico is cars and auto parts. The tariffs will negatively affect the auto industry which has already been struggling. The U.S. and Mexico traded $93 billion worth of auto parts and vehicles, per CBS News.
- Produce: The U.S. imported $10.8 billion of produce from Mexico in 2017, with tomatoes topping the list of imported vegetable, per the Washington Post.
- Alcohol: Beer and wine will be affected as well. Mexican beers, including Coronoa and Modelo Especial, are some of the best-sellers in the U.S., per USA Today. Nearly $5 billion worth of alcohol is imported, according to CBS.
- Mechanical equipment: $64 billion worth of electrical machinery, $63 million of machinery, $16 billion of mineral fuels and $15 billion worth of optical and medical instruments were all imported from Mexico in 2018, per the Office of the U.S. Trade Representative.
The U.S. Chamber of Commerce is considering options, including taking legal action, to block the Trump administration’s newly announced tariffs on goods imported from Mexico.
When asked on what grounds they plan to sue, a spokesperson for the business lobbying group told Axios: “that’s being explored.”