May 31, 2019
By Dave Graham
MEXICO CITY (Reuters) – Mexico’s president on Friday urged his U.S. counterpart Donald Trump to back down from threats to impose tariffs on its exports to the United States, in a dispute over migration that could create a major economic shock for Mexico.
Trump said he will introduce punitive tariffs on June 10 if Mexico does not halt the flow of illegal immigration from Central America to the United States, battering Mexican financial assets and hurting stocks worldwide.
The ultimatum from Trump is the biggest foreign policy test to date for Mexican President Andres Manuel Lopez Obrador, who during his six months in power has consistently sought to deflect the U.S. president’s barbs and avoid embroiling himself in a confrontation.
“I tell all Mexicans to have faith, we will overcome this attitude of the U.S. government, they will make rectifications because the Mexican people don’t deserve to be treated in the way being attempted,” Lopez Obrador told reporters at his regular morning news conference.
The U.S. Chamber of Commerce, an influential business lobbying group, is looking at ways to challenge Trump’s move, including legal options, an official with the organization said on Friday.
Lopez Obrador said he believed Trump would understand that tariffs were not the way to resolve the matter, but urged Mexicans to unite around his government to face the challenge.
Trump said on Thursday he would ratchet up tariffs unless Mexico stopped people from illegally crossing into the United States. The plan would impose a 5% tariff on Mexican imports starting on June 10 and increase monthly, up to 25% on Oct. 1.
Such a plan would deliver a heavy blow to Mexico’s economy, which relies heavily on exports to the United States of goods from avocados and tequila to televisions and cars made by companies such as Ford and Nissan. Mexico sends around 80 percent of its exports to the United States.
Mexico’s main stock index fell more than 2% after opening on Friday, and the peso currency was down 3% against the dollar.
Foreign Minister Marcelo Ebrard on Twitter called the treatment of Mexico “unfair” and said it made “no economic sense for anyone.”
Trump, who is already in a trade war with China, sought to turn up the pressure on Mexico again on Friday.
“Mexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem. Time for them to finally do what must be done!” Trump wrote on Twitter.
Trump’s trade adviser Peter Navarro said he believed Mexico would respond “very favorably and very quickly”.
Ebrard is to travel to Washington to work on convincing the U.S. government that Trump’s measures were in neither country’s interest, and show that Mexico was making progress containing migration, Lopez Obrador said.
Pledging to exercise “great prudence” in seeking a resolution to the dispute, the Mexican president said he did not want to involve the World Trade Organization for now.
Since taking office in December, Lopez Obrador has urged Trump to help him tackle migration by promoting economic development in Guatemala, Honduras and El Salvador, where most of the migrants apprehended on the U.S. border come from.
A veteran leftist who won a landslide election victory in July 2018, Lopez Obrador has shied away from foreign policy entanglements, preferring to leave diplomacy to Ebrard.
Though Lopez Obrador again stressed the need for diplomacy on Friday, he has in the past offered pointed criticism of Trump over migration policy. He was adamant that he had the support of Mexicans living both in Mexico and the United States.
Lopez Obrador in early 2017 likened Trump’s attitude toward migrants to Nazi Germany’s persecution of Jews.
In a letter responding to Trump’s announcement on Thursday, Lopez Obrador called Trump’s policy of America First “a fallacy” and accused him of turning the United States into a “ghetto” that stigmatized and mistreated migrants.
U.S. officials say the immigration system is being overwhelmed by thousands of migrants, many of whom turn themselves over to border officials to claim asylum in the United States. Border facilities are straining to handle large numbers of people and many children.
At least six migrant children have died in U.S. custody or shortly after being released. Apprehensions of migrants on the southwest border hit another record high last month, with 98,977 people arrested.
(Reporting by Dave Graham; Additional reporting by Stefanie Eschenbacher in Mexico City, Andrea Shalal and Makini Brice in Washington; Editing by Susan Thomas and Alistair Bell)