On the US- Mexico money talks: It moves an approximate of $615 billion, a little more than 10 times the number that the White House asks to build the wall, an amount produced by an active commercial operation which benefits both nations.
The threat to close the border , in case the Aztec government does not make enough efforts to stop the entry of illegal immigrants and drugs, was canceled by president Donald Trump, who gave the government of Andrés Manuel López Obrador one year to put order over the northern border of his country.
Since the US President faced the possibility of closing the border, regardless of the damage to trade, many economic sectors warned about the chaos that the decision would bring to the nation.
Binational trade links are sensitive and have an old tradition, to the point, that the threat was reversed, due to the trading ties existing between both countries. However, the Northern Triangle´s nations did not have the same luck because they represent a serious issue to the United States.
According to Donald Trump, it is now in the hands of the neighboring country to stop the flow of drugs, or otherwise he will impose tariffs on its cars before deciding the closing of the border. The term for achieving that is one year.
Six days after threatening to shut the common border if Mexico did not stop “immediately all the illegal immigration” to the US, Trump changed the term and parameters of his warning.
“We´re gonna give them a one-year warning, and if the drugs do not stop, or largely stop, we’re going to put tariffs on Mexico and products, in particular cars. And if that doesn´t stop the drugs, we close the border, “the President told reporters during a White House speech.
Trump did not explicitly refer to his threat to close the border this week, a warning he was supposed to announce this Friday during a visit to Calixco, a border town in California.
But the president did mention several times the new one-year term that he has decided to give to Mexico, and instead of talking about the border closing as an immediate reprisal, he affirmed that this will be considered only after imposing tariffs on cars, in case the neighboring country does not fulfill its demands.
“If the drugs do not stop, because Mexico can stop them if they want, we will tariff the cars. The Cars are very big. And if that does not work, we are going to close the border. But I think that will work, “he declared.
Trump affirmed that the term of one year begins to run “as of today”, but a few hours later he left open the possibility of imposing tariffs on Mexico before that period elapses.
“Mexico has been very good over the last four days, since I talked about shutting down the border,” Trump said during a meeting with Chinese Vice Premier Liu He.
He said that they were deporting people from Mexico on their way to the United State, and that maybe by the end of the press conference, or the next day, that could stop. In that case, they would go for the tariffs.
Trump said he does not think he has to get to the point of “closing the border,” because “the penalty of tariffs on cars coming to the United States from Mexico at 25 percent will be massive,” and this will make the neighboring country to change.
He also assured that he is not concerned that his threat to impose tariffs will interfere with the ratification of the renewed trade agreement between the US, Mexico and Canada, known as USMCA.
“This is more important to me than the USMCA,” he said.
Trump’s threat to close the border provoked strong complaints from numerous businessmen and politicians, who warned about the devastating economic impact that this measure would have on both countries.
Mexico is the third largest trading partner of the United States, with a good and services trade of $615,000 million in 2017. Many businesses in both countries depend on the border exchange to manufacture their products, including cars.
The US Chamber of Commerce warned this week of “serious economic damage” that would cause disruption of border trade, and several lawmakers from Trump’s party were against the idea.
“Closing down the border would have potentially catastrophic economic impact, and I would hope we would not do that,” Republican Senate Majority Leader Mitch McConnell said on Tuesday.
Translated by: José Espinoza