His approach to Peña Nieto suggests this is one adversary he fails to understand.
.. His strategy has been to soften up the opponent with verbal abuse and extreme threats, including the possibility of tearing up Nafta altogether... “The president-elect has done a wonderful job of preconditioning other countries [with] whom we will be negotiating that change is coming,” Commerce Secretary-designate Wilbur Ross gloated during his Senate confirmation hearing. “The peso didn’t go down 35% by accident. Even the Canadian dollar has gotten somewhat weaker—also not an accident. He has done some of the work that we need to do in order to get better trade deals.”.. Maybe Mr. Trump should have Googled the Treaty of Guadalupe Hidalgo. Mexicans are still smarting over that one... The White House responded by saying it would extract the money for the wall with a 20% tariff on Mexican exports to the U.S. Of course American consumers would be the ones paying. But in any case it would be the end of Nafta.Americans have to hope their new president is not that reckless... “sales of food and farm products to Mexico totaled a record $19.5 billion in fiscal year 2014.” That was 13% of U.S. agricultural exports.
.. Mr. Trump says that the U.S. has been outfoxed in manufacturing because American companies now make things in Mexico. But imports from Mexico contain significant American content, and production-sharing across the continent has given U.S. companies an edge in the global market.
.. But it is being debated whether that would repeal the congressional legislation that put it into effect. If so, tariffs would revert to pre-Nafta levels, which implies using the World Trade Organization tariff schedule. American exporters to Mexico would face greater tariff hikes than Mexican exporters to the U.S., because Mexico accepted much greater tariff reductions under Nafta than the U.S. did.
.. Mr. Trump might try to invoke the International Economic Emergency Powers Act of 1977 to slap his oft-promised punitive tariff on Mexican imports. But it is hard to argue that national security is being threatened.
.. The 45th president has said he wants to craft new bilateral trade agreements. Mexico says it is not interested. It has learned a hard lesson about relying on an unreliable partner, and its aim now is to diversify its trade portfolio. Policy makers are said to be exploring new agreements in the region with countries eager to replace U.S. agricultural suppliers.
President Donald Trump’s First Negotiation Was A Humiliation | The Last Word | MSNBC
Lawrence O’Donnell explains why Mexican President Peña Nieto’s decision to not attend a scheduled meeting with Pres. Trump over the border wall is Trump’s first humiliation on the global stage and sends a message to other world leaders about future negotiations.
Trump’s Diplomacy By Humiliation
It is hard to believe that we are now governed by a president who goes out of his way to provoke other nations. The bizarre contretemps with the president of Mexico is pointlessly destructive of one of America’s most important relationships. What kind of president wakes up determined to insult the president of a friendly country — a country whose cooperation we need? It beggars belief.
.. Who benefits from this? Is it really to America’s advantage to have the nation on our southern border hating us? Is it really to America’s advantage to set the stage for the Mexicans to elect a president who promises to spite the United States at every turn? If we crash the Mexican economy, does it help us to have a poorer and more chaotic neighbor on our Southern border? The Mexican state is already feeble versus the drug cartels. Do we want to make it worse?
.. This is diplomacy by humiliation, which is no diplomacy at all. It’s starting to become clear that whoever follows Trump in office is going to have his or her hands full rebuilding things that Trump smashed for no reason other than it felt good to push others around.
How Trump’s wall could beckon a global trade war
But Mexico — or other trading partners — could try to punish Trump and other supporters of the tax by targeting goods in politically sensitive areas, said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics.
“The Mexican minds will be thinking about what they could do that would give President Trump the most pain in his political base,” he said, adding that that might mean “stopping imports of certain products made in Indiana or Michigan or wherever.”
And they could go after areas not directly associated with legal trade.
“They can do all sorts of things we don’t like,” Hufbauer said. “They can legalize marijuana. They can legalize cocaine. They can stop cooperating with the U.S. with respect to refugees from Guatemala, Honduras and so forth.”
The plan, which would target imports while allowing tax-free exports, would boost the value of the dollar, giving customers more purchasing power to manage the higher costs, supporters say.
.. And proponents maintain the costs would even out eventually, even with what Ikenson called a likely “adjustment period” at the start.
.. “But 97 percent of American importers are small businesses, [companies] with under 500 employees. … Small businesses are in the center of the bulls eye in this law.”