Putting the heat on Mexico. U.S. President Donald Trump is reigniting the trade dispute with Mexico – this time over immigration. Trump said on Thursday that 5 percent tariffs on all Mexican exports will kick in on June 10 if the Mexican government doesn’t step up its efforts to stem the flow of undocumented immigrants coming into the United States. It’s unclear at this point what threshold Mexico would need to meet to stave off such U.S. measures; border crossings are likely to drop in the coming months in line with seasonal patterns anyway, giving the U.S. a likely opening to claim victory and avoid an escalation. But the White House said tariffs will increase another 5 percent on the first of every month, up to 25 percent on Oct. 1, if it isn’t satisfied. Mexico isn’t happy about the move; President Andres Manuel Lopez Obrador promptly ordered his foreign minister to Washington and sent a letter to Trump threatening to respond in kind. This comes at a sensitive time in efforts to ratify the updated NAFTA pact, with the U.S., Canada and Mexico each initiating procedures this week to speed up the invariably tricky pursuit of legislative approval. And given how tightly integrated supply chains have become in the two countries, the new taxes on imports will likely have economic and political implications. In the U.S., watch for reactions from border states that will bear the brunt of the economic pain from the new moves – and whose lawmakers will have at least some leverage over the issue if they’re willing to block progress on the U.S.-Mexico-Canada Agreement.
Ripple effects. Implications from the move against Mexico will be felt far and wide – including in the intensifying trade war with China. By setting the precedent that tariffs can be revived over non-trade matters, the move is likely to make China – which has ample non-trade disputes with the U.S. of its own – less inclined to make major trade concessions to get out from under U.S. duties if Beijing thinks they could snap back anyway. So this move can also be read as the latest bit of evidence that both Beijing and Washington are digging in for a longer fight. On the tech war front, meanwhile, Beijing is preparing to roll out major retaliatory measures, though it didn’t provide more detail, over the U.S. decision to blacklist telecommunications giant Huawei, according to the editor of the state-run Global Times. China’s Commerce Ministry announced on Friday that a list of “unreliable” foreign companies, organizations and individuals – i.e. firms that cut ties with Huawei under U.S. pressure – and accompanying punitive measures are forthcoming. And Bloomberg reported that China has a plan in place to restrict exports of rare earth elements to the U.S. and potentially elsewhere if matters escalate.
A purge in North Korea? Hawkish South Korean newspaper Chosun Ilbo, citing a single unnamed source, reported Thursday that North Korea’s top diplomat, Kim Hyok Chol, and at least four other officials who took part in working-level nuclear talks with the U.S. were executed following the collapse of the second summit with Trump in Hanoi. The officials were accused of spying on behalf of the U.S., among other charges. The report said that North Korean leader Kim Jong Un’s interpreter had been banished to a prison camp and that his younger sister, Kim Yo Jong, who accompanied her brother to Hanoi, has been told to lie low. South Korean media has a mixed record, at best, on matters of palace intrigue in Pyongyang. But an unnamed diplomatic source told Reuters that the officials had indeed been punished but probably not executed. And a timely piece in North Korean state media lambasting “anti-party, anti-revolutionary acts” against the regime suggests something is indeed amiss in the Hermit Kingdom. Kim Jong Un certainly has an illustrious track record of violently scapegoating officials when things don’t go his way. Pyongyang is nothing if not a black box when it comes to internal power struggles. But it’s clear that North Korea desperately needs sanctions relief, and Kim Hyok Chol’s team failed to secure it from Trump in Hanoi, presumably intensifying disputes in the capital over what course to take from here. Heads have rolled in Pyongyang for less.
Changing course. The Russian Public Opinion Polling Center has revamped the way it tracks public confidence in Russian politicians after President Vladimir Putin’s trust rating fell to a record low 30.5 percent last week. A new poll released Friday asked people whether they trusted Putin, and more than 72 percent of respondents said they do. Previous surveys had asked respondents to list politicians they trust. The Kremlin had criticized the results of the survey taken last week that showed Putin’s lowest trust rating in 13 years.
- U.S. national security adviser John Bolton said he would present evidence of Iranian involvement in the recent “sabotage” attacks on oil tankers in the Persian Gulf at the U.N. as early as next week. U.S. Secretary of State Mike Pompeo said Iran conducted the attacks to boost global oil prices.
- At an emergency Arab League summit in Mecca, Iraq opposed a final statement that condemned Iranian interference in other countries’ affairs, calling instead for “constructive dialogue” over Iran.
- Poland and the U.S. are nearing an agreement that would send at least 1,000 more American military personnel to Poland, increasing the U.S. troop presence there by almost a quarter. Washington would also beef up its capabilities with a special operations forces component and the creation of a new joint training facility.
- A survey by YouGov for The Times newspaper found that if the U.K. were to hold elections today, the Conservative and Labour parties would both win only 19 percent of the vote, less than half what they secured in the 2017 election. Leading the pack would be the pro-EU Liberal Democrats with 24 percent, followed by the Brexit Party with 22 percent.
- The Brazilian economy contracted 0.2 percent in the first quarter this year compared to the previous quarter, according to the country’s official statistics agency.
- Honduran teachers and medical professionals went on strike yesterday over privatization plans. In Tegucigalpa, students and members of the opposition joined the strike and caused major disruptions at Toncontin International Airport.
- Italian Deputy Prime Minister Matteo Salvini ruled out early elections following his party’s triumph in recent European Parliament elections.
- Italy’s official statistics agency revised its first-quarter gross domestic product growth figure down to 0.1 percent from 0.2 percent.
- Putin and Japanese Prime Minister Shinzo Abe will hold a summit on the sidelines of the G-20 summit on June 29 in Osaka.
- The U.S. and Chinese defense ministers held talks on the sidelines of the ongoing Shangri-La Dialogue security conference in Singapore.
- Russia rejected an Iranian request to purchase S-400 air defense systems, Bloomberg reported, citing two anonymous sources including a senior Russian official.