Going into US inauguration day, our expectation was that President Donald Trump would:
- Stop short of imposing the 25% tariffs on Mexico he had threatened on November 25.
- But refuse to ‘let go’ of the leverage he has created over the country – thereby instead simply ‘extending’ his threat further into the future.
- This is indeed what he did by floating the prospect of said-tariffs now coming into place on February 1.
We continue to believe Mexico will continue to dodge tariffs, in this case on February 1, as:
- We remain unconvinced that President Trump wants to impose tariffs on Mexico, instead ‘merely’ seeking further concessions from the country, and…
- We expect Mexican President Claudia Sheinbaum’s administration will continue to deliver on his demands, in this case by:
- Accepting to reinstate the Remain in Mexico policy, which in fact represents a ‘softer demand’ than Trump’s plausible alternative proposal for Mexico to become a so-called ‘Third Safe Country’.
- Accepting to cooperate with the US on security, which in any case serves Sheinbaum’s internal goal to reconfigure MORENA party loyalties through exercising pressure through the Ministry of Security under the guise of combating cartels.
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Rafael Ch
Partner, Senior Analyst for LatAm & Emerging Markets | Signum Global
+1.917.302.6600
Signum Global Advisors is a policy and strategy firm with offices in New York, San Francisco, Washington, London and Dubai. |
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