Mexico, Stand Up to Trump Over Tariffs

Jorge G. Castañeda

Last week President Trump said that beginning on June 10 the United States will impose a 5 percent tariff, which would gradually increase, on all goods coming from Mexico.

Mr. Trump’s announcement could pose two big problems for Mexico: The so-called migration crisis at the United States-Mexican border and the United States-Mexico-Canada Agreement, or U.S.M.C.A., the new Nafta. President Andrés Manuel López Obrador must address both issues at the same time, but he’s poorly prepared to tackle both.

Mr. López Obrador’s strategy has been to avoid confrontation with Mr. Trump at all costs. Within hours of the tariff announcement, he sent a letter in response that slammed Mr. Trump’s “America first” rhetoric. But in characteristic restrained fashion, he signaled that he preferred dialogue over confrontation.

The reasoning behind this position is simple: Mr. López Obrador is determined to concentrate on his domestic agenda. He views foreign policy issues as distractions, but relations between Mexico and the United States are a domestic issue: trade, immigration, drugs, security and investment are all internal concerns in Mexico, as are most matters related to Central America. Mr. López Obrador doesn’t seem to understand this.

When he began granting more humanitarian visas to Central Americans in December, he failed to see that most Central American migrants on their way to the United States border didn’t want to remain in Mexico. He also radically underestimated Mr. Trump’s obsession with immigration, thinking it was merely electioneering (which it partly is). As the number of Central Americans migrants arriving at the United States border exploded, so did Mr. Trump’s temper.

Mr. Trump’s tariff threat has the single purpose of forcing Mexico to drastically reduce the number of Central Americans moving through the country to the United States. On Sunday, the acting Department of Homeland Security secretary, Kevin McAleenan, outlined three thingsthe United States wants to work on with Mexico.

First, Mexico must sign a “safe third country” agreement that the Trump administration has been pushing for since 2018. This would mean that non-Mexican migrants arriving at the United States-Mexico border would not be eligible to apply for asylum or even be allowed entry into the United States for a hearing, since they would be considered “safe” in Mexico. Second, Washington is demanding a major crackdown on what it calls the transnational criminal organizations managing the transportation of migrants through Mexico. And third, it wants Mexico to seal off its border with Guatemala, if not at the border itself then at the Isthmus of Tehuantepec, which at more than 100 miles wide is Mexico’s narrowest point.

Mr. Trump gave Mexico 10 days to accept these terms. It should not. In addition to the terms being despicable, Mexico is unable to offer safe haven to Central American migrants.

Since January, according to D.H.S. statistics, more than 490,000largely Central American migrants have been detained at the United States border. About 6,000 have been subsequently removed to Mexico to await asylum hearings, in what is known as the Remain in Mexico program, which Mr. López Obrador shamefully accepted last year.

Under a Safe Third Country Agreement, many of these migrants fleeing violence in their countries would most likely be dumped in Mexico’s lap by the Trump administration. The D.H.S. estimates that border apprehensions of Central American migrants will approach one million unless immediate actions are taken.

Sealing off Tehuantepec alone implies shutting down migration across a stretch of jungle more or less as broad as the distance between New York and Philadelphia. If the consequences of rejecting Mr. Trump’s terms, which amount to extortion, are, for now, a 5 percent or 10 percent tariff, so be it. The Mexican peso already underwent a more than 2 percent devaluation last week; an additional 3 percent to compensate for the first increase would have virtually no inflationary impact and could offset the impact of new tariffs. It’s also not be unorthodox in international trade: China often does the same.

By the time the higher tariffs come around, some of the countermeasures Mexico’s allies in the United States could undertake may kick in. They could include legal challenges to the president’s power to apply these tariffs, pressure by American exporters hurt by compensatory and electorally motivated so-called Mexican tariffs, and overall political resistance to Mr. Trump’s decision, including from members of this own administration. Moreover, come summer the migratory flows may well slow down, as the deadly summer heat sets in. That said, a 25 percent tariff would probably be impossible for Mexico to manage.

The trade agreement issue is more complicated. Mexico and Canada just sent the U.S.M.C.A. to their respective legislative branches for ratification. The agreement is irrelevant until America also ratifies it.This requires a simple majority in both houses, and the political and electoral window for persuading Democrats to vote in favor is small and shrinking. Most observers fear that if Speaker Nancy Pelosi does not take it to the House floor by late August, any deliberation will be effectively postponed until after the presidential election. Given the current animosity between House Democrats and the White House, it is hard to see what she could gain by placating Mr. Trump.

For Mexico the harm would be significant. It would provoke uncertainty for investors, who are already nervous about several of Mr. López Obrador’s economic policies. This would be especially true if Mr. Trump were to withdraw from the existing Nafta, something he has threatened on various occasions. Mr. López Obrador, unfortunately, has few cards to play.

His best bet, though far from ideal, would probably be to ask Mr. Trump and Prime Minister Justin Trudeau of Canada to put off the U.S.M.C.A. until after the 2020 elections, to avoid politicizing it, and leave the current Nafta in place until then. He is ill equipped to deal with an agreement that he has been ambivalent toward throughout his career. For years he had been skeptical about Nafta and free trade agreements in general. Starting last year, however, he became an enthusiastic supporter of the U.S.M.C.A., without realizing the obstacles it would face in the United States Congress. His lack of conviction weakens his government’s position.

This is one of the most tense moments in United States-Mexican relations in decades, as was widely predicted. Mr. López Obrador’s policy of avoiding confrontation with Mr. Trump at all costs has failed. He has few alternatives, but they are preferable to constantly kneeling to an administration in Washington that will simply not take yes for an answer.

Dejar un comentario

Tu dirección de correo electrónico no será publicada. Los campos obligatorios están marcados con *