One of America’s most important strategic relationships plunged to a new low Thursday when an escalating dispute over a proposed wall on the U.S.-Mexico border prompted Mexican President Enrique Peña Nieto to cancel a planned visit to the White House.
President Trump has been in office barely a week, but his increasingly bitter feud with Mexico over who would pay for the new wall has left Mexican officials furious and now threatens to ignite a trade war between the two crucial allies.
Peña Nieto had been scheduled next week to be one of the first world leaders to meet with Trump. But a day after Trump issued orders to build a new wall along the U.S. border with Mexico, Peña Nieto on Thursday abruptly canceled the Jan. 31 visit.
The Mexican president’s announcement came after Trump warned him on Twitter early Thursday morning to stay home and skip the meeting unless Mexico is willing to fund construction of the wall. Not long after, Peña Nieto announced he would do just that. Mexico, Peña Nieto said, “offers and demands respect.”
Trump had his own, unique version of events.
“The president of Mexico and myself have agreed to cancel our planned meeting scheduled for next week,” he told Republican lawmakers gathered in Philadelphia. “Unless Mexico is going to treat the United States fairly with respect, such a meeting would be fruitless and I want to go in different route. We have no choice.”
Many Mexicans, meanwhile, cheered their president for standing up to the man who regularly demonized Mexico as a source of U.S. problems during the presidential campaign. Analysts said Trump’s move could be the opening salvo in a trade war.
“You cannot trust a man who hates you, who hates all Mexicans,” said Sergio Ramírez, a 28-year-old engineer in Mexico City. “Mexico must prove that we can go on without them. It's time to shut this man up."
While a presidential candidate, Trump repeatedly said he would build a border Wall — and make Mexico pay for it. Mexico has countered that it would not pay for the wall, and immigration experts question whether the kind of barrier Trump envisions would even be effective. The proposal would add to the 653 miles of fencing and barriers already along the 2,000-mile border.
On Thursday, Trump’s spokesman, Sean Spicer, said the wall could be paid for by imposing a tax on imports. This would include goods such as automobiles and produce from Mexico, where the size of the trade imbalance reached $59 billion in 2015.
Spicer said the tax on Mexico alone was an option that would produce $10 billion a year "and easily pay for the wall just through that mechanism alone."
Mexico and the United States do half a trillion dollars in trade annually, and a trade war between the two would be extremely costly for consumers on both sides of the Rio Grande.
Trump’s instructions Wednesday on building the wall came as his aides met with senior Mexican officials to prepare for the Peña Nieto visit. To Mexicans, the insult could not have been more clear.
“It was a declaration of war,” said Mexican political analyst Jose Antonio Crespo. “Not a military war, but a diplomatic and economic war.”
For years, dating to the Mexican-American War in the 1840s and even before, Mexico has viewed the United States with suspicion, even hostility. The U.S. seized large swaths of Mexican land, including what is today California, and often threw its weight around in diplomacy, trade and other spheres.
A relationship of true cooperation flourished only after the 1994 North American Free Trade Agreement, and then during the U.S.-friendly government of President Felipe Calderon, who took office in 2006.
“In the 1990s, we were the best amigos,” said Genaro Lozano, professor of political science and international relations at the Iberoamerican University in Mexico City. “We were taught that the future of Mexico belonged in North America and we should consider ourselves partners in this region. That’s all gone. Trump is telling us that Mexico is on its own and we should look somewhere else.”
By alienating Mexico, Trump risks a host of problems. Mexico is one of the United States’ top trading partners, creating a market that employs millions of Americans, and is an indispensable partner in controlling illegal immigration and drug trafficking. Trump’s actions also make it more likely that China will continue to make serious inroads in Latin America, profiting from hungry markets and reaping vast mineral wealth.
Trump blames Mexico for sending legions of undesirable people into the U.S. In fact, several studies show more Mexicans are leaving the U.S. than entering. Moreover, the influx of Central American immigrants, which crested in 2015, has been subdued in large part due to Mexico patrolling its border with Guatemala.
“The only reason we don’t have a crisis at our border is because of what Mexico is doing at its [Southern] border,” said a senior State Department official who spoke on the condition of anonymity during a time of uncertain transition.
The rest of Latin America will look warily at Trump’s treatment of Mexico. Veteran diplomats point to what they see as the progress made in recent years: almost every country in Latin America is ruled by a civilian democracy, not a military dictatorship, and most have a favorable opinion of the United States, in contrast to a past when the U.S. was seen as the hemisphere’s biggest bully.
The diplomats worry, however, that such favorable trends could be reversed under Trump. Nowhere is that more important than in Mexico.
“It has taken a generation to build the relationship,” said Eric Farnsworth, vice president of the Council of the Americas, an advocacy group in Washington. “Now it has taken a new direction. This is a new day.”
Relative prosperity and stability in Latin America has been predicated in large part on increased integration and free trade. Trump seems intent on rolling that back. He already removed the United States from the Trans-Pacific Partnership treaty, of which Mexico too is a signatory, and has announced renegotiation of NAFTA. Peña Nieto’s visit was meant to be a first step in that process.
NAFTA governs an interlocking web of commerce across Mexico, the U.S. and Canada, and nurtured a sizable middle class in Mexico, a country that was mired in poverty. But efforts to renegotiate the pact will be challenged if Trump and Peña Nieto are not on speaking terms.
Mexico could retaliate by refusing to cooperate on security and immigration issues, opening the floodgate of Central American immigrants or balking at efforts to stop the northward flow of drugs.
Ordinary Mexicans on Thursday were proud of Peña Nieto’s decision to rebuff Trump.
"Trump wants to see us in the hole,” said Eugenio Arvide, 69. “But we will fight. If you want war, we will go to war.”
"It is a shame what is happening. I grew up admiring the United States, looking to them as an example of freedom, rights, and a strong economy,” said Nidia Romero, a 38-year-old graphic designer. “Trump is the worst example of Americans. There are difficult times for Mexico, but don’t forget they also lose without us.”
Albert Sosa Medina, 47, who sells cars, said, "When there are major disasters, we are always united, always helping each other. We are a united people in the face of this misfortune called ‘Trump.’”
The performance of the Mexican peso was not so sanguine. Having already lost more than 10% of its value against the U.S. dollar since Trump’s election in November, it fell further on Thursday.
Trump, in Philadelphia, again reiterated that the American people would not pay for the wall, nor would he allow U.S. taxpayers to lose money in what he called the “defective transaction” that NAFTA represented. His solution for the wall would be tax legislation that would reduce the trade deficit and increase American exports.
That would be part of a larger legislative agenda that Trump said could make the Republican-led Congress the busiest in decades, or "maybe ever."
In Mexico City, Mario Lara, a 52-year-old merchant, said it’s time for Americans to stand up to Trump. “We’ve had enough of our countrymen being treated badly,” Lara said. “The Americans are aware of everything Mexicans do contribute to their country, and they should put a stop to their president. "
"I want to tell Trump that we are not afraid of him, we know that his country is very strong and powerful, but we Mexicans have dignity and we are not afraid,” Lara said.
|Mexican President Enrique Peña Nieto participates in a local awards ceremony at the presidential residence in Mexico City in January 2017. (European Photopress Agency)|
Mexico wall: Trump condemned over imports tax proposal
Mexico has condemned a US suggestion that it may impose a 20% tax on Mexican imports to pay for President Donald Trump's planned border wall.
Foreign Minister Luis Videgaray said such tax would make Mexican imports more expensive for US consumers and they would end up paying for the wall.
The Mexican president earlier cancelled a visit to the US amid the row of who would pay for the barrier.
The planned wall was one of Mr Trump's key election campaign pledges.
Earlier this week, the president signed an executive order to create a wall along the 2,000-mile (3,200km) US-Mexico border.
Speaking on Thursday, Mr Videgaray said: "A tax on Mexican imports to the United States is not a way to make Mexico pay for the wall, but to a way make the North American consumer pay for it through more expensive avocados, washing machines, televisions.''
He also stressed that paying for Mr Trump's wall "is not negotiable" for Mexico.
Earlier on Thursday, White House spokesman Sean Spicer said a 20% tax could generate approximately $10bn (£8bn) in tax revenue per year.
"Right now our country's policy is to tax exports and let imports flow freely in, which is ridiculous", he said, adding that the tax will "easily pay for the wall".
But Reince Priebus, the White House chief of staff, later said that the border tax is only one of several options being considered.
President Enrique Pena Nieto would have been perceived as very weak if he had travelled to Washington for talks and for many here it would have been tantamount to accepting Mr Trump's central claim - that Mexico will pay for the US border wall.
If that is not up front, then it may come eventually - perhaps under the latest proposal being floated by Donald Trump's White House, a massive 20% border tax on Mexican imports.
As Mexico exports some $300bn of goods a year to the US, the impact of such a proposal would be felt across the country.
Furthermore, the idea of funding a wall through a new tariff is simply unacceptable to most ordinary Mexicans who view the wall as unnecessary, inhumane, expensive and ineffective.
As their elected leader, at least for the next 18 months, Enrique Pena Nieto was left with little option but to deliver that message to the White House - by not going there in person.
The rift between the neighbours and trade partners has deepened just days into Mr Trump's presidency.
After Mexican President Enrique Pena Nieto pulled out of next week's summit, Mr Trump said the meeting would have been "fruitless" if Mexico didn't treat the US "with respect" and pay for the wall.
Earlier Mr Pena Nieto said he "lamented" the plans for the barrier.
In a televised address, the Mexican leader told the nation: "I've said time and again: Mexico won't pay for any wall."
Republican Senator Lindsey Graham warned that US consumers may wind up bearing the cost of the proposed tax.
"Any tariff we can levy they can levy. Huge barrier to econ growth", he wrote online.
"Build that wall" was one of Mr Trump's campaign rally slogans.
Mr Trump's executive orders also called for hiring 10,000 immigration officials to help boost border patrol efforts.
"A nation without borders is not a nation," Mr Trump said. "Beginning today the United States gets back control of its borders."
Mexican president cancels meeting with Trump
Mexican President Enrique Peña Nieto on Thursday canceled a meeting with US President Donald Trump that had been set for next week after renewed tensions erupted over Trump's plan to build a wall on the border.
"This morning we have informed the White House that I will not attend the meeting scheduled for next Tuesday with the POTUS," Peña Nieto tweeted.
Earlier Thursday morning, Trump had tweeted that it would be better to skip the meeting if Peña Nieto continued to insist Mexico would not pay for the wall -- something the Mexican leader had said as recently as Wednesday evening.
"If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting," Trump tweeted and in an earlier tweet he noted the US's trade deficit with Mexico and what he said were the American job losses caused by NAFTA.
Trump spoke about the cancellation during remarks at a gathering of congressional Republicans in Philadelphia.
Trump said that he and the Mexican president had mutually agreed to scrap their planned get together, and he repeated his position that the US won't fund the wall.
"Unless Mexico will treat the US fairly, with respect, such a meeting is fruitless, and I want to go a different route," Trump told House and Senate GOP lawmakers. "I have no choice."
"Border security is a serious, serious issue and a national problem," Trump said. "Most illegal immigration is coming from our Southern border."
On Wednesday night, Peña Nieto had said at that time he did not see a need to scrap the get together -- but he strongly reiterated that his country wouldn't fund any border wall, which Senate Majority leader Mitch McConnell said Thursday would cost $12-$15 billion.
"President Trump's insistence that Mexico will pay for the wall has once again just been proven as delusional fiction by the Mexican President," said House Democratic leader Nancy Pelosi. "The wall is a multi-billion dollar boondoggle in the making, and Republicans should be embarrassed about their brazen hypocrisy in enabling it."
"Mexico does not believe in walls. I've said time again; Mexico will not pay for any wall," the Mexican president said in a video statement posted to Twitter and translated by CNN from Spanish.
The back-and-forth between the two leaders began last year during the first days of the Trump campaign when he called some Mexicans entering the US criminals and rapists and tensions lingered throughout the 2016 contest. They escalated sharply over the last 24 hours when Trump took executive action on Wednesday to begin the process of erecting a wall.
The President announced that move while a high-level Mexican delegation was visiting the White House -- the first foreign representatives to come since Trump took office -- for meetings with top officials, including Chief of Staff Reince Priebus and adviser Jared Kushner.
One member of the delegation, Mexican Foreign Minister Luis Videgaray, who had led talks between his government and the Trump transition team, was in his car on his way to meetings at the Department of Homeland Security on Thursday when he suddenly decided he would not attend.
"We will work to schedule a future meeting and will continue to keep the lines of communication and partnership open," said DHS Spokeswoman Gillian Christensen.
In his video address, Peña Nieto also said he had ordered government agencies to step up protection for immigrants.
"I've asked for the minister of Foreign Relations to re-enforce protection measures to our citizens," he said. He added that the 50 Mexican consulates in the US will be used to defend the rights of immigrants in the country and issued a call to action to legislators and civic organizations to help immigrants.
Peña Nieto closed his message by saying Mexico offers and expects respect. "Mexico offers its friendship to the people of the United States and expresses its wish to arrive at agreements with its government, deals that will be in favor of Mexico and the Mexicans," he said.
Earlier Wednesday, Trump signed two executive orders directing construction of a wall on the US-Mexico border, boosting border patrol forces, and increasing the number of immigration enforcement officers who carry out deportations.
Meanwhile, the Mexican officials who arrived Wednesday had been expected to lay the groundwork for Peña Nieto's visit next week, which Mexican diplomats had seen as an important opportunity to try to move past the anti-Mexico rhetoric Trump used during the campaign and a chance to put the relationship back on track.
"There is ... frustration with our government and ourselves that we have not been able to tell the story of this important relationship," a Mexican diplomat told CNN ahead of the delegation's visit. "There are a lot of stereotypes of Mexicans in the US, but there are also stereotypes of Americans in Mexico. It is in the interest of both governments to explain what this relationship is and what we can do together."
In a Monday speech, Peña Nieto said his government is prepared to negotiate with the US if Mexico's national sovereignty is respected. He laid out economic integration and respect for the rights of migrants and the money they send home as his nation's key negotiating points.
"Neither confrontation nor submission. Dialogue is the solution," Peña Nieto said.
Trump has suggested some of the $25 billion in annual remittances that migrants return home would be retained to pay for the border wall.
Trump flew to Mexico City during his campaign to meet Peña Nieto and said they discussed a wall Trump has vowed to build on the US southern border, but not his demand that Mexico pay for it -- an assertion the Mexican president later disputed.
"At the start of the conversation with Donald Trump, I made it clear that Mexico will not pay for the wall," Peña Nieto tweeted, after their meeting, which was widely viewed as a public relations disaster for Peña Nieto.