BLOOMBERG: Mexico’s President Andres Manuel Lopez Obrador has done everything by the book to avoid confronting Donald Trump. The U.S. president’s new threat of tariffs throws that policy into question.
In his first response to the challenge, Lopez Obrador maintained the strategy he has followed with Trump in his first six months in power: He spoke about the need to avoid confrontation, deepen dialogue and find a long-term solution to the problem of migration with the U.S. He even addressed himself to Trump as "your friend" in the two-page letter he posted on the Mexican president Twitter account.
The problem is that approach faces clear limitations with an increasingly belligerent neighbor to the north. Mexico sends near 80 percent of its exports to the U.S. and even a five percent tariff on all its goods as Trump is proposing would have devastating consequences on its economy.
"It would be naive to think that Trump will not continue threatening bilateral trade and bilateral relations, as he gets closer to his re-election campaign," said Alejandro Schtulmann, who heads Mexico City-based consultancy Empra. Mexico will "drastically need to increase funding for immigration authorities and detention centers."
The peso, which Lopez Obrador often cites as a sign of his good performance, plunged on the news.
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Editor's Note: The main image accompanying the above news clip shows trucks waiting in a long queue for border customs control to cross into the U.S. at the Otay border crossing in Tijuana, Mexico April 2, 2019. (Photo: Reuters/Jorge Duenes)
