Wednesday, May 3, 2017

Yanqui Matón: How Trump's Bullying of Mexico is Playing With Fire

 by Nomad

In his book "Trump: The Art of the Deal," Mr. Trump- or somebody he paid- wrote:  
"Bullies may act tough, but really they're closet cowards. "
it is hardly an original observation but given the source, it is typical Trump hypocrisy. 
Perhaps nowhere can we better see the Trump's bully personality than his position on our neighbor to the South.  

La Intimidación del Yanqui

Trump's hard-ass diatribes against Mexico included blaming that country for exporting its undesirables (criminals, drug dealers, and rapists) to the US to cause mayhem and to steal American jobs. 
He has- at least, in the past- boasted that he would build an extremely expensive wall to keep Mexicans out and would somehow force the Mexican government to pay for it. In addition, Trump has been pushing to renegotiate NAFTA, the trade agreement that has bound the economies of both countries (and Canada) for more than 20 years.
During the campaign, a lot of voters bought the hateful rhetoric and unfounded allegations. 

Trump's bombastic tirades might have been politically advantageous but they also have had real-life damaging effects. Not just for the undocumented workers living and working inside US borders but in Mexico itself. In January, it was reported:
Donald Trump’s relentless Mexico-bashing throughout 2016 and the trade worries that inflamed, weakened the peso by around 20% last year. The monstrous peso sell-off that’s resulted has whipped prices in Mexico steadily higher.
Inflation is likely to worsen. That will probably lead to less to investment in the Mexican economy, exactly what the country doesn't need.
Investors are dumping pesos because if Trump sees through his vague threats to raise trade barriers, plummeting demand for Mexican exports—four fifths of which are bought by Americans—will sink the peso even more and drag the country into recession. The depreciating currency, in turn, heaps pressure on domestic prices. The tightening job market, sluggish growth in productivity, and a recent sharp hike in gas prices are exacerbating Mexico’s peso woes.
In terms of the immigration problem, a broken economy is exactly the thing that will spur a huge surge in Mexican migration to the United States.

According to a recent article, "Mexico's Revenge" by Franklın Foer of The Atlantic, in Mexico, public pressure has forced the hand of the political leaders to confront President Trump and fight back.  
With a presidential election in just over a year...vehement responses to Trump are considered an electoral necessity. Memos outlining policies that could wound the United States have begun flying around Mexico City.
 On the Southern side of the border standing up to Trump is a matter of national pride.
These show that Trump has committed the bully’s error of underestimating the target of his gibes. As it turns out, Mexico could hurt the United States very badly.
Antagonizing friendly neighbors is exactly the kind of foolishness that competent leaders try their level best to avoid. Not so any longer.
[T]he Trump administration has come dangerously close to trashing the relationship—and, in the process, unleashing a terrifying new reality.
You might ask, realistically, what are Mexico's retaliatory options? In a word, China.  

Mexico's China Card

During the Cold War, the US paid a lot of attention to the threat of Soviet expansion in Latin America. US foreign policy and military strategy was shaped on the principle that the Soviet Union would not be allowed to export its ideology to our backyard. 

With the collapse of the Soviet empire that threat vanished.
Today it isn't the Russians. It's the Chinese who are investing in nations like Peru, Brazil, and Venezuela, by funding infrastructure projects. (The US cannot even maintain or fund its own infrastructure development.)
From 2000 to 2013, China’s bilateral trade with Latin America increased by 2,300 percent, according to one calculation. A raft of recently inked deals forms the architecture for China to double its annual trade with the region, to $500 billion, by the middle of the next decade.
Chinese investment in Mexico, however, has remained limited, due mostly to a lack of exportable commodities. Should Chinese leaders change their strategy, investment in Mexico would clearly be seen in Washington with some understandable alarm.  Trump's insults and crowd-pleasing bombast may have already set closer Chinese-Mexico relations in motion. 

Moreover, if Mexico wishes to become a thorn in the side of the US, this is not the only option it has. Ask Europe what happens when a border country leaves its back doors open for escaping refugees.

During the campaign, Trump successfully stoked irrational fears of floods of hostile dangerous Mexicans gangs slipping across the border. In fact,  more Mexicans now leave the United States each year than arrive. 
(How the US plans to replace this very useful and economical source of cheap labor is anybody's guess.) 
For the past few years, the border has been periodically flooded with Central Americans fleeing gang violence. Those surges could have been far larger had Mexico not stepped up enforcement of its southern border with Guatemala in 2014, largely stanching the flow of migrants. From 2014 through July 2016, with American prodding, the Mexicans detained approximately 425,000 migrants who were attempting to make their way to the United States.
Trump isn't solving problems but, in fact, ensuring the problems become a reality. What is needed is cooperation, not hostility and resentment and distrust. 
Alas, Trump doesn't do "soft power." He bullies and he blusters. Because of this personal inadequacy, there will be a heavy price to pay.


A Looming Trade War?

It doesn't require the Amazing Criswell to realize that allowing Trump to destroy the US-Mexico relationship, however flawed it might seem. would be an "ugly and painful, a strategic blunder of the highest order." 

After all, Mexico is our third-largest trading partner for goods. Destroying that relationship will adversely affect the $583.6 billion in total cross-border commerce for the sake of a U.S. goods and services trade deficit of $49.2 billion.
Even without playing the China card, Mexico has a selection of options if it chooses to exact punishment on the US. Last month, there were signs that Trump's threats are likely to backfire.

When it came to tuna exports, Mexico have long insisted that trade laws unfairly discriminated against the Mexican tuna fishing industry. Other countries, they said, despite having upheld international standards on commercial fishing and environmental preservation, other countries didn't face the same level of enforcement.
The World Trade Organization agreed and ruled in Mexico's favor. If it so chooses, it could impose trade sanctions worth $163 million a year against the U.S.

There's also rumblings with corn imports and dairy imports from the US. In both cases, Mexico seems to be looking for new trading partners.
Even Fox News is beginning to question the wisdom of forsaking NAFTA. A recent article pointed out that not every industry has suffered under the trade agreement.

"Mexico was actually the second largest export market for the beef industry last year by volume," rancher Kevin Ochsner points out.... American agriculture has been the biggest winner when it comes to trade with Mexico: $2.6 billion in U.S. corn alone went south of the border last year. In light of current tensions with the U.S., Mexico reportedly began talks last month with Argentina and Brazil to increase imports from those countries. 
A trade war between Mexico and the US (which- if Trump's threats are serious- will be one of several around the globe) is much more likely to damage the US economy in the short and medium term.

Internal Divisions

There's one final paradox to Trump's ill-advised attitude towards Mexico. According to a recent Gallup poll, Americans now have a more favorable view of Mexico than they have in over a decade.
Sixty-four percent of Americans say they have "very" or "mostly" favorable views of the country, up from 59% in 2016 and the highest since 2006.
Americans' favorable opinions of Mexico hit all-time lows at 2011. 2011 . Since that time, Mexico's image has gradually improved, rising 19 percentage points.
That boost hasn't come from Republican voters.
The overall increase in positive views of Mexico since last year is largely due to more Democrats viewing Mexico favorably. A record-high 83% of Democrats view Mexico favorably, up 11 points since last year -- likely a sympathetic bump in reaction to Trump's positions on Mexico and Mexican immigrants in the U.S.
Gallup also notes that this perception gap between the two parties is not new, but it is currently at its widest. Trump's political take on Mexico, it seems, is all about division rather than unifying.

Here's an audio version of The Atlantic article, courtesy of Soundcloud.