Submitted by: Veronica Coffin
By Terresa Monroe-Hamilton
Looks like Mexico is now willing to discuss “The Wall” with President Trump. On election night as Trump swept to an unprecedented victory here in the US, the peso got hammered. I’m sure they want to head off another “Tequila Crisis” like they saw after NAFTA was signed into being. Mexico profits greatly from the US – 80 percent of their exports go to the US. A tariff would wreck their economy. So, El Presidente now seems amicable to discussing controlling the free flow of immigrants over our southern border. Imagine that.
Mexico is scared to death that Trump will follow through with his threat to start mass deportations and that he would seize monies sent by those in America illegally to Mexico to pay for the wall if Mexico won’t pony up for it. Trump wants to renegotiate NAFTA. Canada has already said they are open to that move… Mexico is very leery of it because it could really hurt their economy. But Trump isn’t in this for Mexico… he’s in it for the US. I imagine he will negotiate whatever benefits us the most.
Although Donald Trump’s election was shocking to the Mexican government, President Enrique Peña Nieto was one of first world leaders to congratulate President-elect Trump and seems ready to negotiate a new economic deal to prevent a trade war.
Mexico is very worried that President Trump will actually follow through on his promises to conduct massive deportations, to apply new trade tariffs and to demand renegotiation of the North American Free Trade Agreement. Pena Nieto’s invitation for Trump to make an official Mexican visit in August now seems brilliant.
The Mexican government promised to intervene in currency markets to prevent any disruptive fall in the peso from the U.S. elections. But Mexico’s financial markets have been hammered since Election Day, with their peso currency crashing by 13 percent.
This week’s panic selling was worse than the start of Mexico’s 1994 “Tequila Crisis.” That disaster came a year after the signing of NAFTA in December 1993 by Mexico’s President Carlos Salinas and U.S. President Bill Clinton.
Mexico currently has a huge risk in regards to a trade war with President Trump and the United States. About 90 percent of US-based fortune 500 companies now have made substantial investments in Mexico. According to the US Bureau of Economic Analysis’ report from 2012, US multinational enterprises employed 1,106,700 people in Mexico, but Mexican companies only employ 68,800 in the United States. That is very lopsided and definitely doesn’t equally benefit America.
Mexico is America’s second-largest export market, with $236 billion, or 15.7 percent, of all US exports in 2015. That is up 468 percent since NAFTA was signed in 1993. Mexico’s 2017 budget does not provide any of the $12 billion to build a 50-foot-high concrete wall along the 1,989 mile US/Mexico border. Trump claims they will pay one way or the other. Louie Gohmert says the wall has already been allotted for in the US – the money has already been set aside. Now the devil is in the details to get the money from Mexico to pay us back for the expenditure.