On Thursday, following President Donald Trump’s order Wednesday to start construction on a border wall “immediately,” Mexican President Enrique Peña Nieto announced he was canceling his upcoming trip to Washington, D.C.
“Mexico does not believe in walls,” Peña Nieto announced in a video statement. “I have said time and time again, Mexico will not pay for any wall.”
'Mexico does not believe in walls… Mexico will not pay for any wall,' says President Enrique Peña Nieto. More at: https://t.co/ed74cWMc8F pic.twitter.com/Zh1dBpW8uE
— Financial Times (@FT) January 26, 2017
Trump responded via his favorite medium. “The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers… of jobs and companies lost,” the president tweeted. “If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting.”
The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers…
— Donald J. Trump (@realDonaldTrump) January 26, 2017
of jobs and companies lost. If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting.
— Donald J. Trump (@realDonaldTrump) January 26, 2017
There is a great deal of debate on the trade deficit with Mexico, and some have argued Trump’s numbers are deceptive. Interestingly, according to a report from Trading Economics, the balance of trade between the two countries shifted, to a $200 million surplus in favor of the United States, in December of last year.
On the subject of economics, the Mexican peso took a plunge following news of the canceled meeting. At 8:50 a.m. Eastern time, the currency had been up by as much as 0.8 percent at 20.9358 per dollar. By 11:57 a.m. Eastern, it dropped 1.2 percent to land at 21.3175 per dollar, Business Insider reported.
Trump met with Peña Nieto last August, and the two seemed to come out of the meeting with very different understandings of what they agreed to. Trump said they never discussed the wall, while Peña Nieto said he told the then-candidate Mexico would never pay for the wall.
In any case, the border-wall project is essential to Trump’s presidency, as it formed the key promise of his campaign. When he signed the executive orders on Wednesday, the White House admitted that the wall will be paid for by American taxpayers first, but it promised that Mexico will later reimburse them. His campaign put out a plan in April suggesting that Trump would use the Patriot Act to make Mexico pay.
This might suggest why the peso is dropping — no matter what Peña Nieto says, it seems like Trump might be able to make it happen anyway.
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