U.S. officials are set to meet with Mexican negotiators Thursday for a second day of immigration talks, with President Donald Trump's threat to slap 5% tariffs on all Mexican imports looming over the discussions. The duties are set to kick in in just four days.
Trump threatened to implement rising tariffs on all Mexican imports if the country did not stop the increasing tide of undocumented migrants crossing the southern U.S. border.
The first day of high-level talks at the White House, which included Vice President Mike Pence and Mexican Foreign Minister Marcelo Ebrard, ended without a deal Wednesday afternoon, with both sides failing to bridge their differences on the immigration issue.
Staff-level meetings between U.S. and Mexican officials were expected to continue at the White House, an administration official told CNBC on Thursday morning. There were also meetings between the two countries at the State Department.
Trump, who was in Europe meeting with world leaders and commemorating the 75th anniversary of the D-Day invasion, told reporters earlier Thursday that "I think a lot of progress was made yesterday, but we have to make a lot of progress."
"We'll see what happens," Trump added. "But, something pretty dramatic could happen. We've told Mexico, 'the tariffs go on,' and I mean it too. I'm very happy with it."
Pence, who traveled Thursday to the National D-Day Memorial in Bedford, Virginia, was not expected to join the talks in Washington, D.C.
If no agreement is struck at Thursday's talks, Trump wrote in a tweet Wednesday, then the tariffs "will begin on Monday, with monthly increases as per schedule." The tariffs could rise to 25% on all Mexican goods by October.
A senior administration official told CNBC that the White House asked Mexico to hold Central American asylum seekers by striking a "safe third country" agreement, like the one the U.S. has with Canada. Such countries provide protections from persecution for asylum seekers.
Mexican officials have suggested its economy could not bear the burden of an influx of migrants, and Mexico's foreign minister on Monday called the safe-third country designation a "red line" in negotiations.
Nonprofit international human rights organization Human Rights First published a fact sheet in November arguing that Mexico does not meet the requirements to become a "safe third country."
The White House also wants Mexico to accept the "Migrant Protection Protocols," which require migrants without proper documentation to remain in Mexico "for the duration of their immigration proceedings."
Those protocols, instituted in late January by then-Homeland Security Secretary Kirstjen Nielsen, were meant to "decrease the number of those taking advantage" of the U.S. immigration system. The policy has reportedly drawn criticism over concerns about human rights and a slew of logistical questions.
While Trump wants to get a deal with Mexico wrapped up soon, the likeliest scenario is that the two countries will strike an agreement between June 10 and July 1, when the tariffs ratchet up to 10%, a senior administration official told CNBC.
Mexican officials have signaled they are open to discussing ways to address the immigration situation at the border, which the Trump administration is calling a "full-blown emergency." A record number of undocumented immigrants — more than 144,000 — flooded the southwest border in May, according to Customs and Border Protection officials.
But when Trump announced the tariffs in a surprise tweet last Thursday, it was not clear what his administration specifically wanted Mexico to do to curb illegal immigration.
Trump initially said the U.S. would slap the tariffs on "until such time as illegal migrants coming through Mexico, and into our Country, STOP."
But a White House statement released just after that tweet said that "if the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed."
On a call with reporters that night, Trump's acting chief of staff, Mick Mulvaney, said the White House didn't have a "specific percentage" or level of reduction in mind.
On Wednesday, White House trade advisor Peter Navarro offered his own proposals in a television interview, saying the tariffs "may not have to go into effect at all" if Mexico agreed to make certain concessions during the talks.
Navarro said Mexico would need to crack down on asylum seekers, strengthen enforcement of its own southern border with Guatemala and address government corruption at Mexican immigration checkpoints.
"That's it. That's what we're looking for," Navarro claimed. But it was unclear what level of influence, if any, Navarro had on the negotiations. He did not appear to be present for the talks Wednesday.