U.S. President Donald Trump on Thursday threatened to eventually slap tariffs on car imports from Mexico unless it does more to stop drug trafficking, in his latest warning to America’s southern neighbor to tighten border security.
After backing away from a threat this week to immediately shut the border if Mexico does not do enough to halt illegal immigration, Trump gave the country a deadline to do more to stop drugs or face tariffs.
“We’re going to give them a one-year warning, and if the drugs don’t stop, or largely stop, we’re going to put tariffs on Mexico and products – in particular cars. The whole ballgame is cars,” Trump told reporters. He also suggested that future tariffs could be linked to Mexico helping fight illegal immigration.
Trump prompted panic among business leaders last Friday by saying he would likely close the border this week to deal with a surge of migrants from Central America, but has since walked back the threat.
Trump’s remarks briefly pushed auto shares lower before they rebound. The S&P 1500 automobiles and components index was up 1.6 percent in Thursday afternoon trading, outperforming the S&P 500, which was little changed. Shares of General Motors Co and Ford Motor Co were both up about 1.2 percent each.