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.

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