Mexico Now Optimistic About Trump Presidency
Mexico is growing more optimistic about The Trump Presidency because items he promised as a candidate have not yet come to fruition, namely, revising or cancelling the North American Free Trade Agreement (NAFTA) and building a wall on the US southern border, in addition to executive order setbacks to deport illegal immigrants.
While judges block President Trump’s executive orders on immigration, Mexican officials see a reprieve as initiatives stall the early stages of the new administration.
Also, new US Commerce Secretary Wilbur Ross is thought to be considering the formation of a “very sensible” agreement with Mexico that proposes a deal more like the Trans-Pacific Partnership (TPP), where the US and Mexico could forge bonds to create a “mutually beneficial regional powerhouse,” according an unknown source.
As a result, the Peso has nearly sprung back to levels before the Y 2016 US Presidential election, thereby reducing the risk of higher inflation and interest rates.
In addition, JPMorgan Chase (NYSE:JPM) recently upped its growth forecast for Mexico from 1.3 to 2%.
Still of concern to the Mexican government are issues including what the US could do regarding changes to its tax law. A proposal to initiate a “border-adjustment tax” could hurt countries that export goods to the US, and, consumer spending is down in Mexico due to higher inflation.
The unease of what the future holds for Mexico could serve as a catalyst for what the country should be doing anyway regarding its problems, such as spreading prosperity, raising productivity and strengthening the rule of law.
Mexico’s poor infrastructure and criminality are detrimental to its growth.
Have a terrific weekend.
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