Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

U.S. tariff threat backs Mexican president into corner, facing Trump

Stock MarketsMay 31, 2019 09:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Mexico's President Andres Manuel Lopez Obrador attends a news conference at the National Palace in Mexico City

By Dave Graham

MEXICO CITY (Reuters) - U.S. President Donald Trump's threats to slap punitive tariffs on all Mexican trade if Mexico does not stop illegal immigration has punched a gaping hole in his Mexican counterpart's hands-off approach to diplomacy, with potentially ruinous consequences.

Mexico could face a severe economic shock if Trump makes good on a pledge to impose escalating tariffs of 5% on all Mexican goods from June 10 if the country does not halt a recent surge of migrants from Central America crossing the U.S. border.

The news, delivered in a tweet on Thursday evening, battered the peso and fueled concern about President Andres Manuel Lopez Obrador's reluctance to engage in foreign affairs or push back against Trump on his touchstone issue of illegal immigration.

It also raised fears that the Republican president will keep attacking Mexico as he seeks re-election next year.

In power since December, the leftist Lopez Obrador has tried to deflect Trump's barbs, insisting that the best way to tackle migrant flows is by jointly fostering development in Guatemala, Honduras and El Salvador, where most of the migrants apprehended on the U.S. border come from.

Trump has shown no enthusiasm for the idea.

In his day-to-day business, the 65-year-old Mexican president has stayed focused on domestic issues, pursuing a nationalist agenda of economic self-reliance and putting the brakes on foreign investment in the oil industry.

Foreign policy has been largely left in the hands of Foreign Minister Marcelo Ebrard, who has been dispatched to Washington to persuade the Trump administration to back down.

"Lopez Obrador doesn't want to get involved in this, but it's impossible to avoid," said former foreign minister Jorge Castaneda, a longstanding critic of Lopez Obrador, who says he has failed to grasp the significance of the U.S. relationship.

"Relations with the United States in Mexico are not a foreign policy issue. They are a domestic policy issue."

Around 80 percent of Mexico's exports are sent to the United States, whose businesses by far account for the biggest source of foreign direct investment to the country. U.S. business groups and lawmakers have said tariffs could be devastating to both countries.

Lopez Obrador told his morning news conference on Friday he believes the U.S. government will ultimately "rectify" its position. Asked if he would change the country's migration policy to accommodate Trump's request, he said Mexico is already tackling the problem.

Mexican officials have signaled they will respond in kind if Washington actually imposes tariffs, steps likely to target regions with high concentrations of Trump voters.

But doubts are growing in Mexico about whether Lopez Obrador has taken the wrong tack by downplaying U.S. provocations.

Agustin Basave, a former diplomat and ex-leader of the center-left Party of the Democratic Revolution, said Mexico had to put cooperation on security, combating drug trafficking and migration with Washington "on the table" to stand up to Trump.

There was no point in trying to "appease" Trump because even if Mexico completely sealed its southern border with Guatemala, he would keep demanding concessions, Basave added.

Trump has said this year he will cut off U.S. aid to Central America and threatened to close the Mexico-U.S. border.

"He'll use Mexico as a scarecrow the whole time," Basave said. "And this will increase the closer the (U.S.) election gets."


Mexico faces an uphill struggle to contain immigration, particularly in the wake of budget cuts to migration authorities made to fund Lopez Obrador's flagship welfare policies.

One Mexican official, speaking on condition of anonymity, said the number of people seeking to reach the United States from the rest of Latin America through Mexico is now so great that Mexico could only hope to "administer" the problem.

Hector Vasconcelos, a lawmaker from the ruling National Regeneration Movement (MORENA) who heads the Senate foreign relations committee, said Lopez Obrador was right to try to manage tensions by not reacting to Trump's broadsides.

"It's always been a given for me that President Trump could do anything at any moment," Vasconcelos told Reuters, pointing to how the U.S. election process was influencing his rhetoric.

"I think we need to get used to this being President Trump's way of governing. So I don't think there is a way out," he added, saying that if Mexico had taken a more combative approach to Trump, bilateral relations would today be even worse.

Among diplomats and government officials, widespread unease about Lopez Obrador's attitude extends beyond his dealings with Trump to the international stage in general.

In March, Lopez Obrador said he had asked Spain to apologize for crimes committed during the Spanish conquest of Mexico in 1519-1521, a step one foreign diplomat from a third country described as "nuts".

The president's announcement this month that he wanted to ditch the so-called Merida Initiative, a framework for security cooperation with the United States, did little to cement stronger U.S.-Mexico ties.

Sergio Alcocer, a former deputy foreign minister for North America, said the Merida scheme was beneficial to Mexico because it made Washington assume co-responsibility for security matters that have helped fan bilateral tensions over the border.

"If you leave the mechanism, you lose that," he said.

U.S. tariff threat backs Mexican president into corner, facing Trump

Related Articles

What to Make of the Recent Stock Market Pullback?
What to Make of the Recent Stock Market Pullback? By StockNews - Nov 27, 2021

I had written up a commentary that I intended to send out this morning that was going to focus on some bigger-picture, strategic items related to market cycles and developing...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Lynn McCord
the907man Jun 01, 2019 2:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Pretty simple. Stop illegals from entering Mexico. This is not rocket science.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email