mexico politics trade

Trump Is ‘Pleased To Inform You’ He Was Just Kidding About Those Mexico Tariffs

The farce is complete.

The farce is complete.

Eight days after stunning markets, GOP lawmakers and his own advisors by threatening to slap Mexico with across-the-board tariffs in retaliation for the surge of illegal immigrants crossing  the US border, Donald Trump is “pleased to inform you” that the tariffs will not be going into effect after all.

“The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the US on Monday, against Mexico, are hereby indefinitely suspended”, Trump said on Friday evening. “Mexico, in turn, has agreed to take strong measures to stem the tide of Migration through Mexico, and to our Southern Border”, he continued, inexplicable capitalizations and all.

The measures Mexico will take will “greatly reduce, or eliminate, Illegal Immigration”, Trump went on to promise, again employing superfluous capital letters in the course of creating proper nouns that didn’t previously exist.

One imagines he’ll just put his draft national emergency declaration in a folder somewhere and save it for the next “emergency”, which is probably just a month or so away.

Mexican foreign minister Marcelo Ebrard, who spent the last three days negotiating with Mike Pence, Bob Lighthizer (who didn’t support the tariffs in the first place) and Mike Pompeo, confirmed the deal. “There will be no US tariff application on Monday”, he said, in an exhausted-sounding tweet of his own. ‘Thanks to all the people who have supported us by realizing the greatness of Mexico.”

According to Ebrard, Mexico will deploy the national guard and conduct an “immigration enforcement surge”. The country will also offer work opportunities to asylum seekers. He described the deal as a “fair balance” with the US, although you’d be forgiven for suggesting it’s anything but. It sounds like Trump simply held the tariff gun on Mexico until they agreed to play the role of US immigration police.

If you read the joint declaration (copied in full below), it is largely vacuous. There are no definitive guidelines for measuring success and no monitoring system. Invariably, Trump will be at Mexico’s throat again within months.

For his part, Andres Manuel Lopez Obrador says this is largely thanks to Mexico’s efforts. “Thanks to the support of all Mexicans, the imposition of tariffs on Mexican products exported to the United States was avoided”, AMLO declared.

The English language isn’t a sufficient tool to communicate the sheer, blatant absurdity of this entire ordeal. Spanish, apparently, fails in that regard too.

We will never know if Trump was serious, but what we do know is that the mere threat of the tariffs was enough to effectively cement the case for interest rate cuts from the Fed. The fact that Trump was willing to risk the USMCA is evidence enough that he may well throw caution to the wind again, say, with the Europeans, over the auto tariffs issue. Next time, he may have his bluff called. And there’s still a strong case to be made that the situation with China passed the point of no return with the Huawei ban.

One thing we do know is that Trump has succeeded in turning every, single day of his presidency into a soap opera. The Mexico tariff drama is but the latest example. In his defense, it’s probably fair to say the “ratings” were indeed “tremendous” this week.

AMLO is just happy it’s over. “In any case, we will gather to celebrate tomorrow in Tijuana at 5:00 p.m.”, he said Friday.

Republican lawmakers will be celebrating too – just not in Tijuana. The GOP is now off the hook when it comes to having to choose between tariffs and risking Trump’s ire by passing a veto-proof resolution.

The only question now is whether Stephen Miller is satisfied.

Joint declaration from State

The United States and Mexico met this week to address the shared challenges of irregular migration, to include the entry of migrants into the United States in violation of U.S. law. Given the dramatic increase in migrants moving from Central America through Mexico to the United States, both countries recognize the vital importance of rapidly resolving the humanitarian emergency and security situation. The Governments of the United States and Mexico will work together to immediately implement a durable solution.

As a result of these discussions, the United States and Mexico commit to:

Mexican Enforcement Surge

Mexico will take unprecedented steps to increase enforcement to curb irregular migration, to include the deployment of its National Guard throughout Mexico, giving priority to its southern border. Mexico is also taking decisive action to dismantle human smuggling and trafficking organizations as well as their illicit financial and transportation networks. Additionally, the United States and Mexico commit to strengthen bilateral cooperation, including information sharing and coordinated actions to better protect and secure our common border.

Migrant Protection Protocols

The United States will immediately expand the implementation of the existing Migrant Protection Protocols across its entire Southern Border. This means that those crossing the U.S. Southern Border to seek asylum will be rapidly returned to Mexico where they may await the adjudication of their asylum claims.

In response, Mexico will authorize the entrance of all of those individuals for humanitarian reasons, in compliance with its international obligations, while they await the adjudication of their asylum claims. Mexico will also offer jobs, healthcare and education according to its principles.

The United States commits to work to accelerate the adjudication of asylum claims and to conclude removal proceedings as expeditiously as possible.

Further Actions

Both parties also agree that, in the event the measures adopted do not have the expected results, they will take further actions. Therefore, the United States and Mexico will continue their discussions on the terms of additional understandings to address irregular migrant flows and asylum issues, to be completed and announced within 90 days, if necessary.

Ongoing Regional Strategy

The United States and Mexico reiterate their previous statement of December 18, 2018, that both countries recognize the strong links between promoting development and economic growth in southern Mexico and the success of promoting prosperity, good governance and security in Central America. The United States and Mexico welcome the Comprehensive Development Plan launched by the Government of Mexico in concert with the Governments of El Salvador, Guatemala and Honduras to promote these goals. The United States and Mexico will lead in working with regional and international partners to build a more prosperous and secure Central America to address the underlying causes of migration, so that citizens of the region can build better lives for themselves and their families at home.


5 comments on “Trump Is ‘Pleased To Inform You’ He Was Just Kidding About Those Mexico Tariffs

  1. The relief rally is generally bigger than the draw down at the time of the initial announcement so why not do all this till that changes…..

  2. Why do markets still care about what he says? Maybe algos scanning news and key words. Normal human beings stopped doing it. One day also algos will be recoded to ignore his tweets.

  3. This ends up looking like a win for Trump… disgusting as that is.

    Now I am expecting the trade war and tariffs to be on again off again…….with
    a total ending of the “war” …..just in time to give Trump big Market gains before
    the election.

    This is beginning to look purposeful……as hard as that is to believe.

    • Actually it is easy to believe as long as “normal human beings” jump every time he tweets…….purposeful….YES

  4. Not just “normal human beings” jumping……so are the Market makers.

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