The agreement reached last week between Secretaries Mike Pompeo and Marcelo Ebrard was an obvious victory for Donald Trump. It is true that Foreign Secretary, Marcelo Ebrard managed to quell the threat of tariffs that would be going into effect right about now. However, the migration crisis that Trump used to make the Mexican government bend was created by Mexico.
Within this agreement, Ebrard took a hit but simultaneously avoided a larger crisis. In reality, he didn’t have any other choice when confronted with the staggering statistics presented by his American counterparts. More than 144 thousand migrants were detained at the border in May and 553 thousand were detained in the first five of months of the presidency of Andres Manuel Lopez Obrador. The irresponsible opening of the southern border, without sufficient regulation, or worse yet, reduced regulation, to manage increased flows of migration, evoked an emergency that did not previously exist.
The topic of migration became tied to credit ratings when agencies Fitch and Moody’s downgraded Mexico’s sovereign debt rating and the outlook of Pemex (the Mexican state-owned petroleum company). In this case we also see that the decisions made by the Mexican government prompted a negative outcome, thus finical deterioration coupled with the migration crisis placed Mexico on a silver platter for the President of the United States.
The underlying issue is that the campaign strategy of the Mexican and American presidents are becoming very expensive for us. Donald Trump’s is inevitable; seeing as it occurred in 2016 we will yet again be hostages of his aggressive election campaign. That of President Lopez Obrador is confronting him with doses of reality and quantifying the cost of fantasies.
Considering the context, and given that the agreement only delayed the imposition of tariffs, it would be a good idea to face what is to come.
Looking toward Trump, taking the offensive. The reason he was able to halt the 5% tariff was because of internal domestic pressures by producers, legislators, and governors (including Republicans) concerning the economic hit the US would face, and the threat of retaliatory tariffs by Mexico, which was the case in 2018.
There would also be legal action taken for violating the rules of the WTO and NAFTA and for enforcing and abusing the International Emergency Economic Powers Act.
Meanwhile, Lopez Obrador has backtracked and changed course regarding immigration, but now he is celebrating as though he were out of the woods and free from danger.
Someone should calculate the cost of unnecessary crises for Lopez Obrador and give him the advice of economist Jonathan Heath, “The risk of tariffs is not a threat dormant for 45 days, nor for the remaining year and half of Trump’s campaign, but it is rather a permanent risk so long as he is in power.”
Amongst his joy over the agreement reached with the US, will Lopez Obrador register the cruel paradox we are in? If the agreement is successful, will we be validating Donald Trump’s anti-Mexican discourse and the effectiveness of ultimatums. If the agreement is not successful we will face tariffs. In both cases the only judge will be Trump.
About the Author
The Mexico Institute seeks to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship. A binational Advisory Board, chaired by Luis Téllez and Earl Anthony Wayne, oversees the work of the Mexico Institute. Read more