Mexico Looking for Market Opportunities in China

Mexico Looking for Market Opportunities in China

Mexico Looking for Market Opportunities in China

US President Donald Trump has given Mexico plenty to worry over, but the country is bent on averting confrontation with its main trade partner as it looks to Asia and other parts to diversify its export markets, say Mexican political observers. But, Donald Trump has a trade stranglehold on Mexico.

President Trump’s style and disruptive policy changes have brought bi-lateral ties to an “standstill,” said Benjamin Temkin, a research professor at the Latin American Faculty of Social Sciences in Mexico City.

Mexico is working to break the “impasse” by playing up its strengths and relying on national unity “to resist the pressures of the new US government,” Mr. Temkin said.

“Mexico wants to continue to maintain trade ties with the US, but it is not willing to have conditions dictated … that no Mexican government is going to be able to accept,” said Mr. Temkin.

Experts say that although the United States is believed to have the upper hand in the bi-lateral dealings, Mexico has limited options.

Mexico is now turning to Europe, China and other Latin American countries to seek more trade ties.

President Trump came to office on 20 January and it set up to renegotiate the North American Free Trade Agreement (NAFTA) concerning the United States, Mexico and Canada to get better concessions for US industries and workers.

He has also floated the idea of applying a 20% tariff on Mexican imports to finance building a wall along the US-Mexico border to keep out illegal migration and drug trafficking.

The tax proposal is “unacceptable” and in violation of the existing trade agreements, said Enrique Vargas del Villar, President of the National Association of Mayors (Anac).

The Anac supports Mexican President Enrique Pena Nieto’s efforts to renegotiate NAFTA, but “we will only accept conditions that also benefit us, not just Trump,” said Mr. Vargas.

The Mayor of Huixquilucan, a town in the central state of Mexico, believes that President Trump’s inexperience in public office will complicate negotiations.

Since the United States imports 62% of its vegetables, 35% of the fruits and many other foods from Mexico, the suggested tariff would 1st hit American customers who have to pay a higher price for products from Mexico.

Mexico is very reliance on the United States as its main export destination.

Mexico should not be so dependent on a single market, said Vargas, noting that “it can and should diversify its exports to Latin America, Europe, China and Japan.”

The Big Q: Can it?

Have a terrific week.

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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