Mexico Says Tariffs May Backfire As Talks With U.S. Begin By Bloomberg


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© Bloomberg. A employee oversees a machine changing liquid materials into metal billets at a metal facility in San Luis Potosi, Mexico.

(Bloomberg) — Mexican officers started talks to avert President Donald Trump’s proposed tariffs, arguing the transfer may backfire by derailing the nation’s efforts to stem the move of Central American migrants to the U.S.

Mexico has returned tens of 1000’s of individuals fleeing Honduras, Guatemala and El Salvador this yr, paying for shelter, meals, transportation and medical help, Foreign Minister Marcelo Ebrard informed reporters on Monday. More than 1 / 4 million extra migrants would attain the U.S. this yr from the area with out Mexico’s assist, he added.

The U.S. menace to impose the tariffs on all Mexican items and probably cancel help applications for Central America may trigger monetary and financial hardship in Mexico and harm the nation’s efforts to deal with migration flows, he mentioned. Mexico is keen to work with the U.S., however its capability to satisfy Trump’s calls for is restricted by the nation’s structure, a worldwide migration pact signed in Morocco final yr and “the dignity of Mexico,” Ebrard mentioned.

Ebrard mentioned that an concept favored by some U.S. officers to drive Central American migrants searching for asylum within the U.S. to as a substitute accomplish that with Mexico as a “secure third nation” wouldn’t be acceptable.

“We’ve been saying for some time {that a} ‘secure third nation’ settlement wouldn’t be acceptable for Mexico,” Ebrard mentioned. “Up till now, they haven’t proposed it to me.”

Ebrard arrived in Washington late Friday evening and together with Mexican Ambassador Martha Barcena met with U.S. Secretary of Homeland Security Kevin McAleenan on Sunday, in accordance with two folks conversant in the dialog, who requested to not named as a result of it hasn’t been made public. Meetings on Monday will embrace the Department of Agriculture, the Department of Commerce, the U.S. Trade Representative and the Department of Homeland Security, Ebrard mentioned.

Mexican officers are emphasizing the significance of the connection between the 2 nations, echoing the tone adopted by President Andres Manuel Lopez Obrador, who mentioned on Monday morning in Mexico City that he’s optimistic a deal might be reached to keep away from tariffs. Trump final week threatened to slap 5% duties on all Mexican items on June 10 that might rise to 25% by October except the nation steps up its work to battle unlawful immigration. The transfer roiled markets and opened a brand new entrance in Trump’s commerce wars.

Investors had been much less optimistic. The peso slumped on Monday, falling 0.7% to 19.7618 by 1:30 p.m. in New York.

The tariff menace may derail passage of the U.S.-Mexico-Canada Agreement — the successor to the Nafta commerce deal — simply because the three nations appeared set to hunt ratification from their legislatures.

Republican Chuck Grassley, chairman of the Senate Finance Committee, mentioned final week the tariffs may jeopardize the passage of USMCA, including that commerce coverage and border safety ought to stay separate points.

(Adds remark from international minister in third paragraph.)

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