May 31, 2019 / 3:54 PM / 25 days ago

SNAPSHOT-Trump heightens trade tensions with tariffs on Mexico

May 31 (Reuters) - U.S. President Donald Trump, already at loggerheads with China over tariffs, has announced U.S. levies on all goods from Mexico unless it stopped people from illegally crossing into the United States, increasing fears that opening a new trade war front will threaten global and U.S. growth.

Here’s a snapshot of latest developments on Friday:

* Mexico’s President Andres Manuel Lopez Obrador urged Trump to back down from the threats and promised “great prudence” in seeking a resolution to the dispute. Mexican exports to the United States of goods from avocados to cars and televisions are vital to the Mexican economy. Mexico sends around 80% of its exports to the United States.

* Trump announced late on Thursday the U.S. will levy punitive tariffs of 5% on June 10 if Mexico does not halt the flow of illegal immigration from Central America to the United States. The tariffs will increase monthly, up to 25% on Oct. 1.

* Trump’s shock warning battered Mexican financial assets, hurt stocks worldwide and boosted safe-haven sovereign bonds. Mexico’s main stock index fell more than 2% after opening, and the peso currency was down 3% against the dollar.

* In a move likely to further heighten trade tensions, China threatened on Friday to unveil a hit-list of “unreliable” foreign firms, groups and individuals that harm the interests of Chinese companies, as retaliatory tariffs on imported U.S. goods were set to kick in at midnight.

* Already at odds over trade, Chinese and U.S. defense chiefs were expected to clash over China’s growing global security role at a weekend Asia security summit. A U.S. military report on the Indo-Pacific region, to be released on Saturday, sharply criticizes Beijing’s security policies, according to a draft seen by Reuters.

Compiled by Susan Thomas; Editing by Howard Goller

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