"So, there's no specific target, there's no specific percent, but things have to get better", Mulvaney said.
"That old-fashioned economic orthodoxy doesn't work when it's relatively easy to substitute other goods, " Mulvaney said, predicting a jump in USA production of consumer goods to fill the gap.
On Sunday, Trump issued a fresh portion of wisdom on Twitter when he vented his frustration over America's neighbor south of the border.
Trump declared a national emergency at the U.S. -Mexico border in February, in the midst of a government shutdown over Congress' refusal to grant significant funds for a border wall, which he deems necessary to tackle the "crisis" of thousands of undocumented migrants crossing the United States southern frontier.
Mexico has provided humanitarian visas to encourage migrants headed for the U.S.to stay in the country and is now taking back hundreds of migrants from other countries who have pending asylum cases in USA immigration court under the "remain in Mexico" policy.
President Donald Trump on June 2 described Mexico as an "abuser" of the United States and offered an ultimatum: either stop the "invasion" along the southern border or American companies will be "brought back" through the new tariffs imposed on Mexican goods.
The first 5% tariff will hit on June 10, covering every import from Mexico.
But the president has been here before, issuing high-stakes threats over his frustration with the flow of migrants only to later back off.
Those hopes were dashed Thursday, when Trump announced potential tariffs on Mexico, even as the Mexican legislature was preparing to soon consider the US-Mexico-Canada trade agreement. "Could be fixed so easily if they would vote with Republicans to fix the loopholes!" he tweeted. He said it's unlikely Trump will actually impose them.
"There are some companies that 5% is what their margin is going to be, so you're talking about companies that are not going to be able to ship anymore", said Gaytan.
"The results are going to be good because there is an atmosphere that is favourable to dialogue both in this country and in the United States", the Mexican president said, adding that he doubted the tariffs would ultimately take effect.
Mexican President Andrés Manuel López Obrador dispatched his foreign secretary to Washington to try to negotiate a solution. It also risks further damaging the already strained relationship between the US and Mexico, two countries whose economics are deeply intertwined.
He suggested the government could seal its southern border with Guatemala, crack down on domestic terrorist organizations and make Mexico a safe place for migrants seeking to apply for asylum.
Jorge Guajardo, a former Mexican diplomat who is now a senior director at the McLarty Associates consulting firm, said he wonders why any country would agree to a trade deal with Trump after what's happened to Mexico.
Mulvaney insisted that Trump's threat is real.
USA manufacturers said the tariff, set to take effect June 10, would have devastating consequences on them and American consumers.
Meanwhile, on Sunday, the president blasted congressional Democrats, claiming they "are doing nothing" to address securing the border.
"These proposed tariffs would have devastating consequences on manufacturers in America and on American consumers", said Jay Timmons, chief executive officer of the National Association of Manufacturers.
He said Mexico could be ready to step up measures to contain a recent surge in migration in order to reach a deal with the United States.
Analysts said Trump's shock move jeopardised the chances of ratifying a new trade agreement with Canada and Mexico, known as the USMCA.
Trump is pushing Congress to change USA law to make it more hard for the migrants to claim asylum. The chairman of the Finance Committee, Sen. Most are Central American families and children on their own traveling up to the border.
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