Will a US Trade Battle with Mexico Take Place?

The War on Tomatoes and Avocados

While the whole world has been fixated on the unfolding battle between the U.S. and China, another trade war was supposedly breaking out at the beginning of this week – a trade war no less brutal and tough, and in terms of its consequences, possibly even more destructive and crippling for both sides than any other. The two sides are the closest of neighbors, bound by a vast number of various ties.

So, what’s the problem? President Donald Trump decided to raise tariffs on imported Mexican goods by 5% per month beginning June 10, possibly reaching 25% by October in the event there is a failure on the part of Mexico’s government to reach an understanding. The increased tariffs would have affected all Mexican goods, including car parts—more than 60% the market for car parts is in the U.S.—causing a real stir in Mexico. A delegation from Mexico lead by the minister of foreign affairs quickly arrived in Washington seeking to prevent the imposition of the tariffs.

Mexican President Andrés Manuel López Obrador originally planned to travel to Washington to persuade the White House not to begin the trade war. On Sunday, President Obrador spoke to Trump over the phone and expressed his willingness to begin a dialogue. “I told him that, when I am in Tijuana, I will say that the president of the United States does not raise a closed fist, but rather an open and outspoken hand,” the Mexican president tweeted.

The trade relationship between the U.S. and Mexico is the most important relationship in North America, and ranks third in terms of value for Washington after Canada and China. However, as you might guess, the issue here was in no way linked to trade, but to the unprecedented wave of migration from Central American countries sweeping through Mexico.

In May alone, more than 144,000 migrants from El Salvador, Guatemala, Honduras, Haiti and Cuba were arrested at the Mexico-United States border by U.S. immigration services. Of these, 84,000 migrants at the border without legal documentation were trying to reach the United States with their families, with up to seven people in each family. More than 11,000 children between the ages of 2 (!) and 13 traveling without parents were arrested by U.S. patrol services while crossing the Rio Grande.

“I have had enough of hearing the pathetic babble of excuses from Mexican leaders,” said Trump. “They are always making promises, saying that they have never previously dealt with such a situation, but what’s that got to do with us? They don’t understand the verbal warning, so we will punish Mexico financially, in the toughest way possible.”*

How has this threatened bilateral economic relations between these two countries? Here’s an example. In one year, Mexico exports more than $12 billion worth of fruit and vegetables to the U.S. The three main products that Mexico exports are tomatoes, avocados and green peppers, which are bought by practically every American family. Paying an additional 5 to 10 cents per pound for these products is, in theory, not a particularly significant burden on the family budget. However, an increase in tariffs could cripple thousands of firms and small to medium-sized businesses not only in Mexico, but in the U.S. border states.

In addition to this, more than 70% of imported beer and 35% of all denim clothing, as well as a lion’s share of spare parts for the assembly of popular cars made by such manufacturers as Toyota and Nissan, are imported into the U.S. from Mexico.

As far as the attempt to solve the migration problem is concerned, forcing the Mexican government to take decisive measures to prevent migrants from other countries traveling through their territory to the American border is not all that simple and straightforward. The problem is that Mexico’s border with Guatemala is completely open. I have been to different points along this border myself and can testify that tens of thousands of migrants from Central America would have no problem crossing it.

The Mexican government does not have the means to furnish the border with some kind of barrier or the ability to deport hundreds of thousands of foreigners who have managed to cross over into Mexican territory. It is impossible for local migration organizations to control the Hondurans and Guatemalans that Mexican authorities are trying to house in its improvised refugee camps. Chaos, fighting and arson attacks are breaking out more frequently in these camps; people are refusing to accept the humanitarian aid provided by the Mexican government and they are demanding to be sent to the American border as soon as possible, at which point, they intend to cross and seek asylum.

We must also not forget about the approaching presidential elections in the United States. If Trump is to stand any real chance of reelection, he needs to demonstrate to his supporters the utmost toughness and ability to stick to what he believes is the most important issue—apart from the growth of the national economy—i.e., immigration.

Furthermore, at the end of June, the U.S. government, on the president’s order, is planning to begin a mass expulsion of settled migrants who are in the country illegally, an action expected to involve approximately 100,000 people every month. Meanwhile, U.S. immigration authorities are planning to draw international media attention to this campaign, in order to show people how extensive the problem of illegal immigration into the country is, primarily immigration from Central American states, and how that is a real threat to national security.

We need to consider that Trump is a big admirer of deals and combining problems when it comes to solving issues. With respect to Mexico, Trump has decided to tie the issue of illegal migration to a two-sided trade agreement and an increase in tariffs. He is sure that the Mexican authorities, under the threat of an inevitable loss, will inevitably reach a compromise on matters of immigration.

And that is what has happened. From Air Force One at the last moment, Trump tweeted that he would not impose the tariffs in exchange for a promise from Mexico to immediately close its border with Guatemala, after Mexico deployed a detachment of its national guard and the army. Mexico also agreed to accept 6,000 migrants from Central America who have already reached American territory, until their asylum request is reviewed.

Regarding the trade war (which was only paused, not canceled), its aim is, if not to fully stop then to reduce mass illegal migration across the Mexico-United States border to a minimum. If Trump is successful in doing this, then his chances of retaining his position in the White House will increase significantly.

*Editor’s note: Although this remark is accurately translated, it could not be independently verified.