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President Trump’s latest tariff threat against Mexico has some worried that American consumers and businesses would end up paying the price. The uncertainty caused by the president’s announcement of increased tariffs against Mexico agitated financial markets, causing them to plummet.

As the United States is already engaged in one trade war with China, investors and executives are worried about the prospect of another one against Mexico. From a broader perspective, a trade war with Mexico would hit the U.S. economy hard. From a consumer perspective, everything would get more expensive.

Moreover, imposing tariffs on Mexico would likely be considered illegal under World Trade Organization rules. Trade experts say that such a threat signals to U.S. trading partners that the president is willing to break any treaty, even one he proposed.

If President Trump follows through on his threat, the United States could be left with a damaged reputation on the international stage for years to come.

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