This is the Cato Daily Podcast for Friday, May 31st, 2019.

I'm Caleb Brown.

The President has threatened to launch a new 5% tariff on all goods from Mexico starting mid-June.

Cato Simon Lester, a trade policy analyst, details what that means for U.S. consumers,

and other national governments that may now be thinking twice about

launching new trade agreements with the United States.

Given the president's threat to lay 5% tariffs on every product that comes from Mexico.

How does this complicate the trading relationships that the U.S. has in its yet to be passed into law US MCA, the free trade agreement

among Mexico, the United States, and Canada.

Well, with all of the U.S. trading relationships right now, the Trump administration is coming

off as an unreliable partner.

They promise one thing and then they don't follow through on it.

So look, NAFTA, the core of NAFTA is eliminating all tariffs on trade between three countries.

If the US is just going to impose tariffs despite those obligations whenever at once, it's not clear why any other

government would want to be in a trade agreement with us and have a trade relationship with us.

You know, they just can't rely on the commitments that the

Trump administration is making and so so right now we're in the process of we've

renegotiated NAFTA we might then implement it as this new USMCA and in each country

there's this sort of domestic political process to ratify it and you know the

US congressional process is difficult and we can get to that if you want but

Mexico still has to pass to implement USMCA through its Congress and if it turns out that the United States

is going to be imposing tariffs regardless of the USMCA,

...