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WRAPUP 6-Trump says tariffs on Mexico likely, decries migrant 'onslaught'

Steve Holland and Dave Graham

(Adds McConnell quote, Mexico opinion poll)

LONDON/MEXICO CITY, June 4 (Reuters) - President Donald Trump on Tuesday said he would probably defy Mexico, U.S. business groups and lawmakers from his own party and impose new tariffs on all imports from Mexico to pressure authorities there to clamp down on illegal immigration into the United States.

Trump told a news conference in London that the high number of mostly Central American immigrants entering the United States from Mexico would likely force him to go ahead with a plan to put 5% tariffs on Mexican imports.

Even as he fights a trade war with China, Trump has threatened to start the tariffs on Mexico next week and then increase them to as high as 25% later this year if the Mexican government does not do more to stop the migrants.

Mexican leaders were preparing a proposal to present to U.S. officials at a meeting on Wednesday to show they are taking steps to stem the northward flow of migrants, but Trump said the talks in Washington might not resolve the issue.

"We're going to see if we can do something, but I think it's more likely that the tariffs go on," Trump said during a state visit to Britain, describing the entry of illegal immigrants to America as an "invasion."

Trump's tariff threat against Mexico last week spooked global markets and put the ratification of a three-way trade pact between the two countries and Canada further in doubt.

Asked to comment on Trump's remarks, Mexican President Andres Manuel Lopez Obrador told a news conference he was optimistic that a deal on tariffs and migration could be reached.

Trump warned fellow Republicans in Congress not to block his efforts to impose tariffs on Mexico. "I don't think they will do that. I think if they do, it's foolish," he said.

But U.S. Senate Majority Leader Mitch McConnell said there was "not much support" among other Republicans for the tariffs.

Congressional Republicans have discussed whether to block the tariffs, which have been criticized by the U.S. Chamber of Commerce and industry groups on concerns about increased costs for U.S. businesses and consumers.

Mexico exports a broad array of goods to the United States, ranging from cars, auto parts and televisions to popular brands of beer, and is one of the top U.S. trade partners.

Toyota Motor Corp has told its U.S. dealers that it estimates tariffs on Mexican imports could cost the automaker's major suppliers between $215 million and $1.07 billion, according to an email seen by Reuters.

If it goes ahead with the tariffs, the United States will be in a serious dispute with two of its three top trading partners. U.S. relations with China have worsened in the past month as Washington slapped additional tariffs of up to 25% on $200 billion of Chinese goods and Beijing retaliated.

The third main U.S. trade partner, Canada, is nervously watching Washington's dispute with Mexico amid fears that it could hinder ratification of a new North American trade pact that took over a year to negotiate.

'INVASION'

Combating illegal immigration was one of Trump's main campaign pledges in the 2016 presidential election and it looks like it will be a main issue again as he seeks re-election in 2020.

"Mexico should step up and stop this onslaught, this invasion into our country," Trump said on Tuesday, also calling on the U.S. Congress to pass immigration laws to address the situation and blaming Democrats for stalling any such effort.

While Trump often uses emotive language to describe illegal immigration, the issue is a complex one. The number of people apprehended on the U.S.-Mexico border is at the highest monthly level in more than a decade, but is still lower than at other peak periods of illegal immigration since the 1970s.

U.S. authorities are overwhelmed not so much by the number of migrants but by a shift in the type of person turning up at the border in recent years and say they do not have the proper facilities to process families arriving.

Increasing numbers of Central American families and unaccompanied minors seeking asylum from criminal violence back home have been turning themselves in to U.S. border agents who have long been geared up to catch mainly single, adult Mexicans trying to cross clandestinely.

That has presented new challenges for U.S. officials.

In April, border authorities apprehended more than 98,000 people, 60% of them consisting of families, the highest monthly level in more than a decade. Six minors have died while they were in U.S. custody or shortly after being released.

Mexico is now detaining double the number of migrants per day than a year ago, and three times as many as in January, when Lopez Obrador's new government opted instead to give visas to Central Americans, hoping they would stay in Mexico.

Instead, most of them made their way to the border, contributing to the recent surge, Under pressure from the United States, the Mexican government changed strategy, and detentions in May surged past 20,000.

"The most important thing now is to reach an agreement," Lopez Obrador said on Tuesday, indicating he would continue to negotiate with the United States even if Trump went ahead with the tariffs.

Support for Lopez Obrador has grown since Trump threatened the tariffs. A poll for newspaper El Financiero said the Mexican president's approval rating had risen to 72% from 67% in the days before Trump's announcement.

Approval of a deal between the United States, Mexico and Canada to revamp the North American Free Trade Agreement could be hampered by the latest dispute over immigration, Mexican officials say.

Canadian Prime Minister Justin Trudeau, asked about the possible tariffs on Mexico, said on Tuesday that Ottawa would move ahead in a responsible way to ratify the new trade deal.

"We will go through our process in a way that looks to keep pace with and support the American ratification process, where there is a slightly greater degree of debate than in Canada. And we accept the statements by the Mexican leadership that this will not affect their ratification process, the threats President Trump has made," Trudeau told reporters in Vancouver.

Mexican Foreign Minister Marcelo Ebrard is due to meet on Wednesday with U.S. Secretary of State Mike Pompeo in Washington.

(Reporting by Steve Holland in London and Dave Graham in Mexico City Additional reporting by Jason Lange, Susan Cornwell, and Makini Brice in Washington, Stefanie Eschenbacher in Mexico City, Mica Rosenberg in New York and David Ljunggren in Canada Writing by Alistair Bell Editing by Nick Zieminski and Paul Simao)