The Donald Trump Show’s surprise winner just might be Mexico

All things being equal, Mexico seems poised to capitalize on the twin benefits of a surging U.S. economy and a weak currency.
All things being equal, Mexico seems poised to capitalize on the twin benefits of a surging U.S. economy and a weak currency.

By Joe Chidley / Financial Post

A surface reading of the Donald Trump’s impact on the global economy suggests that there is one clear and present loser: Mexico. The new president has hurled so many threats down Mexico way, it’s actually hard to remember all of them.

Let’s see, there’s the wall (which he’ll get Mexico to pay for, somehow), and the “big border tax” on Mexican imports, and also the broader border adjustment tax on all imports. There’s NAFTA renegotiation (which, we Canadians like to think, will hurt Mexico more than us) and the crackdown on undocumented immigrants, and the snubs to Mexico’s leadership.

I’m probably missing something, but even that short list adds up to bad news for NAFTA’s third amigo, right? You would think investors must be running for the hills.

And for a time, they did: In the 10 days following Trump’s Nov. 8 victory, the Mexican Bolsa index, or Mexbol, fell off a cliff, plummeting 8.5 per cent and sealing Mexico’s fate as one of the 10 worst-performing markets in the world in 2016.

The story since then, however, provides an interesting counter-story to all the bad news for Mexico. In fact, despite all the doom-and-gloom and the threats from the White House, investors in the Mexican market have been doing rather well, thank you.

Last Friday, the iShares MSCI Mexico ETF – a popular entry point to the Mexican market for outside investors – rose 1.5 per cent, putting the fund’s three-month return near 13 per cent.

More remarkable, perhaps, was that the Mexbol hit (and then surpassed) 48,470 — where it sat at end of day on Nov. 8, 2016, when Hillary Clinton was still widely expected to become the next president of the United States.

So, you might ask yourself, what happened to the Trump effect? Well, this might be in part a case where the disease is part of the cure — namely, the impact on the Mexican peso and the boost it has given to Mexico’s export competitiveness.

Mexico threatens to ditch U.S. corn imports

ENCA – Mexico has identified a potential weapon in its trade wrangle with US President Donald Trump: lucrative yellow cobs of American corn. The Latin American nation imports billions of dollars’ worth of the yellow grain from the United States to feed its livestock. But with Trump pushing to shake up the countries’ trade ties, Mexico is now threatening to buy from elsewhere.

Jaime Serra on why he doesn’t take Trump seriously

Marketplace – When the United States, Mexico, and Canada launched the negotiations for NAFTA, each nation sent a delegate to work out the details. Mexico sent Dr. Jaime Serra, the Minister of Trade and Industry there at the time. He joined Carla Hills from the United States and Michael Wilson from Canada. The trio worked together over several months to put together the deal. Marketplace host Kai Ryssdal talked to Serra about his experience and what he sees for the future of NAFTA in the Trump administration. An edited transcript of the conversation follows.

AMLO steals spotlight as Nafta woes ease

Bloomberg – With White House officials saying they’re confident a trade deal can be reached to benefit both Mexico and the U.S., the peso has regained more than half of the losses it saw after Donald Trump’s victory pushed it to record lows. Talks aren’t expected until late this year, allowing investors to turn their attention to the next big risk for the Latin American country: a presidential win by opposition candidate Andres Manuel Lopez Obrador, known as Amlo.

Vacationing Americans chant “Build the wall”

Global News – Anaximandro and Sully Amable were all set to enjoy a night watching a pirate show on a boat in the waters off of Cancun. That’s when some U.S. tourists aboard the ship started chanting “build the wall,” in a reference to U.S. President Donald Trump’s plan to build a wall along the U.S. border with Mexico. The chanting didn’t stop even after it clearly made Mexican workers and tourists aboard the ship uncomfortable.

Another journalist killed in Veracruz

CBS – An attacker shot a journalist to death Sunday in Veracruz, adding to the toll in a region plagued by drug gang violence and allegations of government corruption. Journalist Ricardo Monlui is at least the 11th journalist to be slain in just over six years in Veracruz state, but the first since former Gov. Javier Duarte quit last year and vanished in the face of corruption charges.

Mexico seeks to curtail citizen’s rights

NYT – Even as Mexico fumes over President Trump’s aggressive stance toward its people, the Mexican government is quietly trying to rip up basic legal protections for its citizens at home and gut longstanding efforts to fix the nation’s broken rule of law. Legal experts fear the move will set back human rights in Mexico by decades.

Trump seeks $4.1 billion for border wall with no plan for Mexico to pay

Throughout his campaign, Donald Trump vowed to build a "big, beautiful wall" and to make Mexico pay for it.
Throughout his campaign, Donald Trump vowed to build a “big, beautiful wall” and to make Mexico pay for it.

By Todd A. Gillman / Dallas News

The budget plan the White House rolled out Thursday morning includes $4.1 billion for a border wall through next year — and no mechanism to follow through on President Donald Trump’s signature campaign promise to force Mexico to cough up the money.

The plan falls far short on promises to dramatically expand the ranks of Border Patrol and immigration enforcement agents. But it does call for 20 new Justice Department attorneys to work on scooping up border land for the wall through purchases and, presumably, eminent domain.

The president is asking Congress for $1.5 billion toward the wall for the remainder of this year and $2.6 billion in fiscal 2018.

“It’s all that we think that we can spend this year,” White House budget director Mick Mulvaney told reporters Wednesday. “The next question is going to be how many miles of wall does that build. We don’t know the answer to that question because we haven’t settled on construction types. We haven’t settled on where we’re going to start.”

U.S. Fed action deals blow in Mexico

NYT – Like millions of other people from Southeast Asia to Africa to Latin America, Mexicans are absorbing the consequences of a major shift playing out in the global economy. As the Fed lifted rates on Wednesday, it added momentum to a steady stream of money that has been abandoning emerging markets and flowing toward American shores.

Berliners react to Trump’s U.S.-Mexico wall

Al Jazeera – Germany was split for nearly 50 years, with Berlin and its wall coming to symbolise the division between Eastern and Western Europe. As the new US administration begins to make its plan a reality, some Berliners say that the legacy of their wall, and the suffering it caused, should serve as a powerful reminder as to why walls shouldn’t be built.

Monterrey ranked best city in Mexico

Mexico News Daily – Monterrey is the best city in Mexico for quality of life, according to the latest quality of living survey by Mercer, the international human resources consulting firm. The capital of Nuevo León was one of two Mexican cities on the list of 231 and ranked 110th. Mexico City was ranked No. 128, down one position from last year.

Osorio boosts roster for World Cup qualifiers

Fox Sports – Mexico are feeling good right now. They got four points from two away matches against the United States and Panama to start World Cup qualifying, but there are still eight matches to play. Juan Carlos Osorio is well aware of that, and that El Tri need to continue improving so they can make a deep run at next year’s World Cup.