Trump: a “category five hurricane” for the Mexican economy--- former Mexican Central Bank official
How the Close U.S.-Mexico Partnership Could Unravel Under Trump
This is the fifth in a series of posts looking at how Donald Trump’s presidency could impact countries and regions around the world.
Where would Donald Trump be without Mexico to beat up on? As a candidate, Trump loved to make fun of his competitors—from little Marco to lyin’ Ted to Jeb Bush. He never had a nice word to say about Muslims and threatened to jail Hillary Clinton. But his absolute favorite punching bag, which he returned to with remarkable consistency for such an inconsistent guy, was Mexico.
Trump announced his candidacy with an infamous description of Mexican immigrants as criminals and rapists. The construction of a wall along the southern U.S. border became his signature pledge, along with the bizarre insistence that Mexico, those wussies, would pay for it. And he used the North American Free Trade Agreement as a highly-effective bludgeon against both his Republican primary rivals and Hillary Clinton.
Since Trump’s unexpected election, Mexico has reacted with dismay. The value of the peso, which rose and fell throughout the U.S. campaign in inverse correlation with Trump’s poll numbers, has plummeted. Mexico’s Central Bank has cut the country’s growth forecast, with its chief comparing Trump to a “category five hurricane” for the Mexican economy just before announcing his resignation. The government has also instructed its consulates in the United States to step up services to protect immigrants from harassment and deportation.
At home, President Enrique Pena Nieto’s government has been downplaying the impact of Trump, saying it’s too soon to know what he’ll do once he’s in office. “This contrasts radically with what people in Mexico are feeling,” says John Ackerman, a professor at the Institute for Legal Research of the National Autonomous University of Mexico. “There’s a generalized fear and anger at Pena Nieto himself for having played a part in bringing Trump to power and for his total passivity to defend Mexican interests, sovereignty, and the rights of Mexicans in the United States.”
Nieto controversially invited Trump to a meeting in Mexico City in August. It was a grave miscalculation: The trip accomplished the impressive task of making Trump looks somewhat statesmanlike, while doing almost nothing to moderate his rhetoric on trade or immigration. The result of the election is a further blow to an already unpopular government’s standing.
So what will Trump’s election actually mean for Mexico? Right now, Mexican officials are scrambling to figure just how serious Trump was about those campaign pledges. Is Trump really going to build the wall? He and his surrogates are already backing away from the idea that the entire border will be walled, but given how central it was to his campaign, it’s hard to imagine the idea will be abandoned completely. “The symbolism of it is much more important than the physical wall,” says Tom Payan, director of the Mexico Center at Rice University’s Baker Institute for Public Policy. “Mexico saw itself as becoming a true strategic partner of the United States. And all of a sudden, there’s a wall going up, whether it’s partial or total or whatever, it sends a signal that ‘you do not belong here.’”
Mexico has presidential elections in 2018 and is certainly not immune to the anti-establishment mood sweeping democracies everywhere. Payan notes that there’s been “remarkable consensus” between Nieto’s PRI party, and its main rival, the PAN, on the U.S.-Mexico relationship. “They really believed that they were becoming part of a larger North American platform with the United States and Canada,” he told me. But then, “all of a sudden they realized that the relationship is more frail then they thought.”
If Mexicans turn on both parties, the likely beneficiary is more in the mold of Bernie Sanders than Trump: Andres Manuel Lopez Obrador, the left-wing former Mayor of Mexico City and perennial presidential candidate. “He is the one person in Mexico that is perfectly well positioned to take advantage of this,” says Payan. “He is perfectly positioned to take up a more nationalistic discourse. He can say that he is the rescuer of dignity, because Mexicans are feeling a little humiliated.” Obrador is no Hugo Chavez, but his election following Trump’s would likely mark the end of the ever closer political and economic partnership between the U.S. and Mexico.
In Trump’s mercantilist worldview, trade is a zero-sum game and Mexico is “beating” the U.S. by undercutting American manufacturers. This is why Trump says he wants to get rid of NAFTA. But Mexico also buys more American products than any country except Canada, and many of the goods that are counted as imports are actually partly produced in the United States. An estimated 6 million U.S. jobs depend on trade with Mexico. A complete trade breakdown could be disastrous for both countries.
Unlike other deals Trump says he will renegotiate or cancel—the Paris Agreement on climate change, the Iran nuclear agreement, the diplomatic opening to Cuba, to name a few—Trump would need Congressional approval to renegotiate NAFTA, which, given how difficult the deal was to get approved in the first place, could bog down his entire presidency. Nieto says Mexico is not open to renegotiating this agreement. If Trump simply pulls the U.S. out of the deal, the impact might not be massive, since tariffs would still be low between the two countries, who are both in the World Trade Organization. If Trump starts imposing tariffs on Mexican imports, the likely result would be a trade war with Mexico imposing tariffs on its own. This would wreak havoc on the U.S. markets and likely increase the prices of many U.S. goods. It would also grind the Mexican economy—heavily dependent on exports, 80 percent of which go to the U.S.—to a halt, which could have the ironic effect of driving more increasingly desperate Mexican workers to seek jobs north of the border.
There’s one more way the deterioration of ties with Mexico could actually lead to more immigrants coming to the U.S. Contrary to Trump’s campaign rhetoric, immigration from Mexico has been slowing and even saw a net loss last year. But the number of migrants from Central American countries coming to the U.S. through Mexico, including the well-documented cases of unaccompanied minors seeking asylum, have been high. Under U.S. pressure, Mexico launched a program in 2014 to block these migrants. It hasn’t been particularly effective and has been rife with corruption and human rights abuses, but under a Trump administration, Mexico could conceivably abandon the program altogether, leading to more migrants making the trip to the U.S. border.
Trump’s ‘Wall’ at Mexico Border Vanishing as GOP Lawmakers Bolt
The Mexican border wall that Donald Trump promised in the campaign doesn’t really have to be a wall, says Representative Dennis Ross, a member of the president-elect’s transition team.
“The ‘wall’ is a term to help understand it, to describe it,” says Ross, a Florida Republican, adding that it “really means ‘security.’ It could be a fence. It could be open surveillance to prevent people from crossing. It does not mean an actual wall.”
Even the president-elect’s closest allies in Congress are working to redefine Trump’s top campaign promise, which many view as too costly and impractical for securing the 1,933-mile border with Mexico. Most illegal immigration can be halted with fencing, more Border Patrol agents and drones, they contend. House Speaker Paul Ryan on Sunday suggested using approaches that simply make the most sense.
“Conditions on the ground determine what you need in a particular area,” Ryan said in an interview on CBS’s “60 Minutes.”
Trump himself briefly backed away from the idea of a fortified wall days after the election by telling CBS he’d accept fencing in some areas -- but revived his promise last week to a roaring crowd in Cincinnati.
“We will construct a great wall at the border, dismantle the criminal cartel and liberate our communities from the epidemic of gang violence and drugs pouring into our nation,” Trump said.
The president-elect faces perhaps more political pressure to produce results on this issue than on any other. An Oct. 25-Nov. 8 Pew Research Center poll found that 79 percent of registered voters backing him saw illegal immigration as a “very big problem.” Smaller percentages named other issues such as terrorism or jobs for working-class Americans.
A Pew poll in August found that 79 percent of Trump voters want a wall along the entire border with Mexico, compared with just 38 percent of all registered voters.
Republicans in Congress say their plan for border security is more flexible.
“I think a wall is anything that will stop people from coming into the country illegally,” said Representative Lou Barletta, a Pennsylvania Republican who has made curbing illegal immigration a signature issue. “It could be a variety of what can be used to be successful.”
Democrats say a flexible approach will be key to passing a plan in the Senate next year, where 60 votes are needed to clear legislation but Republicans will control at most 52 seats.
‘Wasting Your Time’
“If you’re just talking about a wall, you’re wasting your time,” said Senator Jon Tester, a Montana Democrat on the Homeland Security Committee. “It’s got to be a combination of a number of things we’re already doing -- technology, manpower and physical construction. I think we’re doing that now but we can be doing more.”
Democrats also insist on protecting 750,000 young undocumented immigrants who are temporarily shielded from deportation under a 2012 executive order by President Barack Obama. Republican Senators Lindsey Graham of South Carolina and Jeff Flake of Arizona also back that idea.
“We’re hoping there’s a dramatic scaling back on the campaign rhetoric,” said Senator Tim Kaine of Virginia, this year’s Democratic vice-presidential nominee.
Current law requires the Department of Homeland Security to build reinforced fencing along at least 700 miles of the border, although there’s no deadline and the specific location, height or form of the fence isn’t mandated. The agency reported in October 2014 that it had constructed about 353 miles of fencing to keep out pedestrians and 299 miles of fencing to keep out vehicles. This month, the Congressional Research Service said the agency still needed to construct almost 50 miles of fencing to meet the 700-mile requirement.
Congress’s last significant action on immigration was in 2013, when the Senate -- then controlled by Democrats -- voted to create a path to legal status for 11 million undocumented immigrants in the U.S. and spend $46 billion to secure the Mexican border. The Republican-dominated House didn’t take up the bill, as most in the GOP opposed legal status.
House Majority Leader Kevin McCarthy said last week that a "good place to start" in talks with Trump would be a border-security proposal by House Homeland Security Chairman Mike McCaul. It would require DHS to achieve operational control of the Southwest border in five years while providing a sector-by-sector border analysis and some flexibility to reach the goal.
Perhaps the closest thing to a fortified wall was built under President Bill Clinton, when the U.S. installed a 10-foot-high welded-steel fence along 14 miles of border near San Diego.
Senator John Hoeven, a North Dakota Republican who chairs the Appropriations panel that funds homeland security, said a San Diego-style wall could be a “model” for fortified barriers in highly populated areas, but that other approaches should be used elsewhere.
‘You Also Need Sensors’
“It needs to be a combination of a physical wall, then you also need sensors and other technology,” Hoeven said. “And then you need people. It’s a combination of all three.”
Representative Steve King of Iowa may be one of the only Republicans on Capitol Hill who favors creating a physical wall along the entire border. King, the House’s toughest advocate for border security, insists it is feasible to build a 12-foot-high concrete wall that is 6 inches thick and goes 5 feet underground to deter tunneling.
Like most other lawmakers, though, he thinks Trump’s promise to make Mexico pay for a wall is unlikely to happen, at least not initially.
“The U.S. taxpayers pay for this,” King said. “If Trump can figure out how to get it out of Mexico, I’m all for it. But we should get the resources and get a good design, and move quickly.”
Trump unleashes tweet on Carrier union boss who blasted him
Chuck Jones, president of United Steelworkers Local 1999, has been critical of Trump's claim to have saved 1,100 jobs at the Indianapolis plant since Tuesday.
But shortly after Jones appeared on CNN's "Erin Burnett Out Front" program Wednesday night, the president-elect appeared to blame union leaders like him for companies leaving the U.S.
"Chuck Jones, who is President of United Steelworkers 1999, has done a terrible job representing workers. No wonder companies flee country!" Trump wrote.
He followed up with another attack just over an hour later: "If United Steelworkers 1999 was any good, they would have kept those jobs in Indiana."
Vice President-elect Mike Pence, who is also the governor of Indiana, gave a very different description of the union back in March. He tweeted a photo of a meeting he had about Carrier with Jones and Local 1999 members, calling them "hardworking."
Jones has complained that Trump has fallen short of his campaign promise to keep Carrier from moving 1,400 jobs to Mexico.