Sunday, November 13, 2016

Donald Trump’s Win Goes Down Hard in Mexico

Donald Trump’s Win Goes Down Hard in Mexico
Michelle Arreguin
Nov. 9, 2016 10:34 a.m. ET

Mexico is actually afraid and fearing what could happen next with their economy. The peso has drastically declined and it does not seem there will be an improvement soon. It has been one of the hardest-hit currencies. The main panic for Mexico is if Trump will go through with his word of ending the North American Free Trade Agreement. The uncertainty of what could happen in Mexico has currently made investments completely stop until further notice. They do not want to make a mistake that could completely ruin the Mexican economy. They are trying to start showing the positives and motives why NAFTA cannot be shut down. They are reporting that their exports are at 35% while China’s are only at 3%. Mexico is also stating that the agreement benefits both countries not just one. However, they are prepared to react like they did in 2011, when the U.S. refused to open U.S. roads to Mexican trucks, they will place retaliatory tariffs on a range of products. They want to be treated fairly and want to ensure that their economy stands a chance with all the promises Trump has made over NAFTA. The only thing that is keeping Mexico from completely losing it and taking action now is that they know the U.S. will be greatly affected by the removal of NAFTA. Tariffs for U.S. industrial and agricultural goods entering Mexico would at least initially be higher than for Mexican goods going north. There is 90% of fortune 500 companies invested in Mexico surely no one will want to close that door.

1 comment:

  1. Great article Michelle, this topic concerns me because I have family in Mexico. The peso continuing to decline is of great concern for the Mexican economy. I agree that NAFTA can not be shut down, and Mexico must be treated fairly they account for 35 per cent of exporting.