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Reuters/Carlos Jasso
Done deal?
CHAOS AVERTED

A US-Mexico migration deal has defused Trump’s tariff threat—for now

By John Detrixhe

The US and Mexico have come to an agreement that defuses, for now, Donald Trump’s latest tariff bomb. Mexico says it will deploy its national guard, with a focus on its own southern border, to restrain migration. People who are seeking asylum via the US’s southern border will be returned to Mexico while the US accelerates its processing of those claims.

Trump’s threatened tariffs on nearly $350 billion a year in imports from Mexico were set to have started on Monday, an event that would likely have meant economic havoc for both countries. Mexico said yesterday that it will take “decisive action to dismantle human smuggling and trafficking organizations” and their transportation and financial networks. The US and Mexico are to cooperate on information sharing and border protection.

But worries remain. For one thing, the US president could change his mind, and once again aim financial weaponry at a key trading partner over an issue that has nothing to do with trade. It makes sense for other nations to rethink their links to the world’s largest economy, and their reliance on its currency, technology, and capital markets.

For Mexico, it’s an open question how it will support tens of thousands of Central Americans seeking asylum, potentially putting pressure on its border communities. The US’s southern neighbor said it will authorize entrance of returned asylum seekers on humanitarian grounds, and will offer jobs, health care, and education while their claims are being adjudicated.

Border walls and national guard deployments don’t address the reason migrants are seeking opportunities elsewhere, which is of course a lack of economic opportunities and prosperity at home. Mexican president Andrés Manuel López Obrador has said the US should be spending money on economic development instead of helicopters with machine guns.

This root issue was left to the last paragraph of the joint statement, which mentioned the Comprehensive Development Plan launched by Mexico with the governments in El Salvador, Guatemala, and Honduras. It said the US and Mexico will work with these countries 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.”

John Detrixhe
Future of Finance Reporter
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