President Claudia Sheinbaum says she has a plan to retaliate if our idiot president really goes ahead with his threatened 25% tariffs and won’t negotiate. A few days ago she sent him a “fiery letter” demonstrating that she is not to be trifled with though she can take a light tone. You remember that she countered the “Gulf of America” idea with calling the U.S. “Mexican America.” Yet Google and others immediately changed their maps!
Claudia will not be bullied, but it could be a no-win game: Exports account for roughly 40% of Mexico’s gross domestic product (GDP), and more than 80% goes to the US. The tariffs obviously would suspend the USMCA, the working trade agreement with Mexico and Canada agreed to under Trump’s first term. Together these countries sent $1.01 trillion worth of goods to the U.S. in 2023. They bought $808 billion worth in return.
“The reality is that a large, uncontrolled bully is using his position as the most powerful political leader in the world, to put pressure on a whole range of allies,” said Lawrence Herman, an international trade lawyer and senior fellow at the CD Howe Institute. A former Mexican negotiator put it this way: “It’s a bit like a game of chicken: the two cars are hurtling towards each other at top speed,” he said. “Mexico has to send the signal that its car is not a little one but a big one that could also hurt the United States.”
Meaning, probably, that both sides will be losers. Yet, if you reward the bullies, you’ll get more of the same. A trade war will mean it’s more than avocados, tomatoes and auto parts at stake for Mexico. Claudia’s letter said in part:
For every tariff, there will be a response in kind, until we put at risk our shared enterprises. Yes, shared. For instance, among Mexico’s main exporters to the United States are General Motors, Stellantis, and Ford Motor Company, which arrived in Mexico 80 years ago. Why impose a tariff that would jeopardize them? Such a measure would be unacceptable and would lead to inflation and job losses in both the United States and Mexico.
Mexico is more than ever dependent on commerce with China. Living here, it seems that much of what I buy comes from China. Amazon-Mexico’s products seem mostly to come from China. There are lots of Chinese cars on our streets. Trump’s tariffs would only increase that commerce. The same would hold for Canada. China is already becoming the first or second trading partner with most countries in Latin America.
In one sense I can’t wait for the tariffs to happen. Like the order to hold off all federal grant monies, this too is going to blow up in Der Fuehrer’s Face. Though as in every war, there will always be collateral damage.
We now have our own Il Duce, or wannabe Il Duce. While I hope so much that Claudia stands up to him, I too am concerned about the collateral damage. And the same hope and concern for folks in the U.S.
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