The latest impasse between Trump and Andrés Manuel López Obrador (AMLO) concluded with an “agreement”, which both present to their respective key audiences in their own countries as a victory.
A few weeks ago, Trump boasted that he had achieved the best trade agreement in history with Mexico and Canada, after a year of tense relations with the two main US trade partners. Essentially, he relaunched the NAFTA with a new name, in addition to making specific adjustments that were already being negotiated as amendments two or three years ago.
While Congress approved the new agreement—certain sectors of the House Democratic majority resisted because they were hoping to effectively include important environmental and labor advances in this it—, Trump launched another of his Twitter-battles against Mexico. He threatened to impose a 5% tariff on all imports coming from Mexico unless this government stopped the Central American migration towards the US. Under Trump’s threat, the tariff would increase in a month-to-month basis until the migration matter got resolved.
In a matter of minutes, what he proclaimed to be the best trade agreement in history was forgotten and overstepped before even entering into force—not to mention, also violating the regulations that are transitorily in force. Without any economic rationality, he unilaterally threatened with these tariffs as an attempt to reach a complex migratory objective. However, it is important to address the root causes that result in a humanitarian crisis in the Central American Northern Triangle. Trump’s indisposition to continue investing in cooperation and development resources there has aggravated the situation. These investments would help alleviate and overcome the situation that leads to the migration of thousands of families to the US border. There, they request asylum or refuge in the US, in accordance with the laws of this country and international norms on the protection of human rights. Without considering any of this, Trump based his threat on the abusive invocation of extraordinary powers under the International Emergency Economic Powers Act.
With this rhetorical, lawfully questionable exercise, Trump resumed his populist electoral narrative from the extreme nationalist right that supported his campaign in 2016. From day one, Mexico’s image, as well as that of Mexican immigrants and Latinos in general, has been his favorite punching bag to excite his base, faithful believers of this xenophobic preaching.
By announcing the agreement to “suspend” the proposed tariffs, because Mexico committed to stopping the influx of migrants on its southern border, Trump alleges a victory. It is, without a doubt, a triumph in front of the media and his constituents; it serves his desire to hide the failures and difficulties ha has had while attempting to keep his electoral promises in this field. Among others, three years after being elected, he has not been able to place the first brick in the absurd wall he proposed to separate the US from Mexico.
But, is everything positive for the US? In truth, Trump did not agree to anything but to take back his threats of imposing tariffs unilaterally. For one, he was warned about the legal difficulties his actions could face in both US tribunals and the World Trade Organization. Moreover, advisers from his administration (along with pressures from large sectors of the economy) demonstrated the negative impact of this measure, which is ultimately a tax that would be paid by US importers and consumers (not Mexico). In short, the tariffs would either increase the cost of living or introduce negative disruptions to the production chain of many industries that operate under a shared or integrated economy model with Mexico. At the same time, different voices warned that interruption or reduction of trade in many areas (as a result of the cost created by these tariffs) would affect employment in the prosperous and dynamic activities of logistics, storage, transportation, or distribution in and from the border states with Mexico. Furthermore, this could lead to a Mexican tariff retaliation, which would affect dozens of agricultural and industrial items exported to Mexico from US companies located in more than 30 states, many of these with Republican governors.
Finally, if a commercial battle ends up weakening Mexico economically, it would reflect the migratory problem from that country to the US, largely under control given the opportunities that this exchange market has created in Mexico since the existence of NAFTA, adding this to the migratory pressure that crosses Mexico from Central America.
The press’s thoroughness managed to find some facts in the middle of Trump’s trumpeted alleged triumph. First, it revealed that the supposed migratory agreement is, in essence, nothing different from what Mexico has been posing for years without major results, due to lack of resources, operational capacity, and legal obstacles, without a horizon of solutions to the crisis of violence and poverty that plagues those who live in the northern triangle of Central America. On the other hand, the Mexican authorities consulted by the media denied the version expounded by Trump that Mexico had also committed to buy more American agricultural products.
AMLO, on the other hand, showed his ability to sharpen the political edge of this matter in Mexico. He sold his political base the idea that he both firmly confronted and put an intelligent end to another “gringo threat” against Mexican sovereignty and interests. To the business sectors, he showed without fuss that he understands, beyond political rhetoric, the vital economic and commercial relationship with the US as strategic; and that he is committed to defend that exchange based on free trade and business initiative.
In a few words, AMLO achieved more than Trump, because he sends a confident, serene, and aplomb message in the face of this delicate economic matter to Mexican business people and many sectors still afraid or untrusting of his intentions as Chief of State, without changing his political discourse. Finally, AMLO also addresses the rejection many have towards images of migrant caravans crossing through Mexican territory by saying he would work to stop this migrant influx. There is a long way to go from words to results, but that rhetoric had a positive political impact on AMLO beyond his traditional audiences.
On the contrary, Trump’s actions, beyond talking to his captive and more committed audiences, create more distrust in the economic plane in front of both US and international businesses. They show his indisposition to comply with the commercial and international agreements that he signs or the US maintains, undermining the institutionality that characterizes this great nation on the planet. Even among Republicans, the lack of commitment to international free trade generates immense distrust.
In the end, everything changed so as to not change anything. This story is a game of political postures and images, which places Trump next to other neoauthoritarian and populist leaders that operate from the nationalist right—something unprecedented in the modern and contemporary history of the US, and without a doubt a terrible and dangerous institutional regression.
Para español lea Al Navío: ¿De verdad le ganó Trump a López Obrador la batalla de los aranceles?