Category Archives: Trade

Chipotle could be hurt by Trump’s war on Mexico

Business Insider – The tariff proposal, which the Trump administration walked back saying it was just one option being considered, could make goods from Mexico more expensive. That could pose a huge problem for restaurant chains like Chipotle that heavily rely on Mexican imports.

https://www.aol.com/article/finance/2017/01/31/chipotle-could-bear-the-biggest-brunt-of-trump-s-trade-war-wit/21704171/

How a Corona beer gets from Mexico to U.S.

Reuters – Ordering a bottle of Corona beer at a bar in the United States is a simple proposition. Getting it there from its brewery in Mexico involves a complex, cross-border supply network that will likely get more complicated if U.S. president Donald Trump follows through on vows to renegotiate the North American Free Trade Agreement (NAFTA) or tax imports.

http://www.businessinsider.com/r-rpt-what-it-takes-to-get-a-corona-from-mexico-to-a-us-heartland-bar-2017-1

In Trump fight, Mexico has many ways to punch back

Washington Post – If the trade war is coming, how would Mexico fare? Mexico is not without leverage if this dispute escalates. Top economic officials have already said that Mexico would “mirror” any additional taxes or tariffs that the United States imposes. Former officials have said that Mexico could also tax corporate profits from the many American companies with operations in Mexico.

https://www.washingtonpost.com/world/the_americas/in-fight-with-trump-mexico-has-plenty-of-ways-to-punch-back/2017/01/28/07d57d58-e4d0-11e6-a419-eefe8eff0835_story.html?utm_term=.d8c07ab06f91

The dangers of a U.S.-Mexico trade war

WSJ – The situation between President Donald Trump and Mexico could get rather ugly. A recession in Mexico can backfire for the US – including bringing more of what the “great wall” is trying to prevent. Moreover, the supply chain running through Mexico’s factories is incredibly complex and could result in disruptions and price increases in unexpected areas. US refineries also will lose their key customer.

http://blogs.wsj.com/dailyshot/2017/01/27/wsjs-daily-shot-the-dangers-of-a-us-mexico-trade-war/

How trade shapes Trump’s world view

Washington Post – By cozying up to Russia, and in his disdain for NATO, President Trump appears to have flipped decades of U.S. foreign policy thinking on its head. It has left many experts puzzled, and plenty outraged.But for anyone trying to figure out Trump’s worldview, here’s a really interesting way of looking at things, courtesy of John Robb, who runs the Global Guerrillas blog and is an author and military analyst.

Robb argues that trade — rather than national security — dominates Trump’s foreign policy thinking, inverting decades of U.S. practice. By implication, that makes any country running a large trade surplus with the United States a direct competitor.

https://www.washingtonpost.com/news/worldviews/wp/2017/01/25/trade-trumps-national-security-in-trumps-worldview-thats-really-bad-news-for-china/?utm_term=.eaa0c9e66c33

Economy minister says Mexico might leave Nafta if talks unfavorable

Mexico's Economy Secretary Ildefonso Guajardo Villarreal listens as Mexico's President Enrique Pena Nieto announces a plan to strengthen the economics for families on Jan. 9. (Carlos Jasso/Reuters)
Mexico’s Economy Secretary Ildefonso Guajardo Villarreal listens as Mexico’s President Enrique Pena Nieto announces a plan to strengthen the economics for families on Jan. 9. (Carlos Jasso/Reuters)

By Veronica Gomez and Alexandra Alper / Reuters

Mexico could pull out of the North American Free Trade Agreement if a renegotiation of its terms does not benefit Latin America’s second largest economy, Economy Minister Ildefonso Guajardo said on Tuesday.

“There could be no other option. Go for something that is less than what we already have? It would not make sense to stay,” Guajardo said when asked on local television if Mexico could pull out of the trade deal with Canada and the United States.

U.S. President Donald Trump has vowed to withdraw from NAFTA, which took effect in 1994, if he cannot renegotiate it to benefit American interests.

Trump formally withdrew the United States from the Trans-Pacific Partnership on Monday and said he would renegotiate NAFTA “at the appropriate time.”

Senior U.S. and Mexican officials will meet this week in Washington to discuss trade, security and immigration. Mexican President Enrique Pena Nieto and Trump will meet at the end of January.

http://www.reuters.com/article/us-usa-trade-nafta-idUSKBN1581QF

Trump to Sign Executive Order on Plan to Renegotiate NAFTA With Mexico, Canada

Trump blames Nafta for destroying America's manufacturing sector and called it "one of the worst deals ever.”
Trump blames Nafta for destroying America’s manufacturing sector and called it “one of the worst deals ever.”

By Kristen Welker / NBC

President Donald Trump is expected to sign an executive order as early as Monday stating his intention to renegotiate the free trade agreement between the United States, Canada and Mexico, a White House official told NBC News.

Eliminating the North American Free Trade Agreement (NAFTA), which was crafted by former President Bill Clinton and enacted in 1994, was a frequent Trump campaign promise.

The deal was intended to eliminate most trade tariffs between the three nations, increase investment and tighten protection and enforcement of intellectual property.

“We will be starting negotiations having to do with NAFTA,” Trump said Sunday at a swearing-in ceremony for his top White House advisers. “We are going to start renegotiating on NAFTA, on immigration and on security at the border.”

U.S. manufacturing exports to Canada and Mexico, the United States’ two largest export markets, increased 258 percent under the agreement, according to the website of outgoing U.S. Trade Representative Michael Froman, and the deal helped create a trade surplus in agriculture and manufactured goods.

http://www.nbcnews.com/politics/white-house/trump-sign-executive-order-plan-renegotiate-nafta-mexico-canada-n710641

Mexico braces for Trump assault on Nafta

Financial Times – Despite a good few weeks for Mexico — a successful oil auction; a $1.3bn investment by retailer Walmart; and a bond issue from state oil company Pemex that was six times oversubscribed — a dark, Donald Trump-shaped cloud is looming.

The US president-elect has vowed to renegotiate the North American Free Trade Agreement, or Nafta, that has turned its neighbour into a car, computer, TV and aerospace manufacturing powerhouse. The threat is a crackdown on reshoring to cheap destinations such as Mexico by slapping a 35 per cent tariff on goods imported back into the US by companies that shift jobs or plants abroad.

While Trump has dropped talk of scrapping Nafta outright, Latin America’s second-biggest economy is bracing for uncomfortable changes to a 22-year-old status quo that has transformed it into the US’s second largest trade partner behind China.

https://www.ft.com/content/4a42cabe-c1b3-11e6-9bca-2b93a6856354

Mexico, China very different trading partners

Bloomberg – Although China and Mexico both trade a lot with the U.S., and have both been running significant trade surpluses with the U.S. for decades, that’s where the similarity ends. The China-U.S. trade relationship is spectacularly unbalanced, with a gap between goods exports and imports that exploded not long after China joined the World Trade Organization in 2001 and that, while it has subsided a bit since last year, is still of a scale never seen before “Chimerica” came into being.

https://www.bloomberg.com/view/articles/2016-12-07/mexico-and-china-are-very-different-trading-partners

Commerce secretary pick vows to eliminate “dumb trade”

CNBC – Wilbur Ross, President-elect Donald Trump’s choice for Commerce secretary said he wants to overhaul “dumb trade” deals that the U.S. has with countries around the world. “Believe it or not, Mexico has better treaties with the rest of the world than the United States has. We’re going to fix that,” Ross said as his nomination was being announced.

http://www.cnbc.com/2016/11/30/commerce-secretary-pick-says-mexico-has-better-trade-deals-than-america.html

Canada, Mexico have own Nafta demands

Global News – President-elect Donald Trump‘s plan to renegotiate the North American Free Trade Agreement (NAFTA) to make it “a lot better” for U.S. workers would not be a one-way street for his administration, as Canada and Mexico prepare their own list of demands that could require difficult U.S. concessions.

http://globalnews.ca/news/3081369/canada-mexico-will-also-have-nafta-demands-if-donald-trump-reopens-trade-deal/

Mexico’s options in a Trump trade war

WSJ – It won’t be so easy for Trump to bully the neighbors. National pride will play a role in stiffening the Mexican spine, and President Enrique Peña Nieto’s government is signaling that it intends to face any crisis by deepening structural reforms, getting its fiscal house in order and looking more aggressively for new trading partners. The unspoken message to Trump is that if he plays the protectionist game, Mexico is ready to raise the stakes.

http://www.wsj.com/articles/mexicos-options-in-a-trump-trade-war-1479680567

Can Trump fulfill trade, migration promises?

LAT – Besides his vow to build a wall along the U.S.-Mexico border and step up deportation of  illegal immigrants, Trump has threatened  to nix U.S.-Mexico trade deals, impose tariffs on goods imported from Mexico and cut or tax the billions of dollars in cash remittances sent home annually by Mexican immigrants. What remains unclear is which of Trump’s threats are campaign bluster, which he plans to follow through on, and which could prove impossible.

http://www.latimes.com/world/mexico-americas/la-na-pol-trump-mexico-20161109-story.html