Who backed down? Trump or Mexico? It’s really both. And it’s an illusion Trump gained anything.
Mexican President Statement
1. Mexico will immediately reinforce the northern border with 10,000 members of the National Guard to prevent drug trafficking from Mexico to the United States, particularly fentanyl.
2. The United States is committed to working to prevent the trafficking of high-powered weapons to Mexico.
3. Our teams will begin working today on two fronts: security and trade.
4. They are pausing tariffs for one month from now.
The above text by Mexican President Claudia Sheinbaum Pardo, @Claudiashein translated from X .
The Tie-Tie (at Best) Deal
Mexico appeased Trump’s ego. He gets to brag.
So does Pardo. She gets to brag about halting the flow US guns (whether that happens or not, because Trump likely won’t do a damn thing).
Regardless, this is at best a tie-tie deal that could easily have been accomplished without all the tariff bravado.
What Does it Mean on Fentanyl?
Fentanyl does not fly on a magic carpet into the US by itself. It comes in by carrier.
Trump effectively closed the border. Those illegally crossing are now highly likely to get caught.
An extra 10,000 troops will help, assuming that’s real, but halting all illegal crossing will do more than troops to stop drug traffic than troops.
Pardo Stand Her Ground
The Wall Street Journal reports Mexico, U.S. Agree to Put Tariffs on Hold for One Month
Mexican President Claudia Sheinbaum and U.S. President Trump said that they have agreed to put U.S. tariffs on Mexico on hold for a month after a telephone conversation in which both leaders agreed to take joint measures to fight fentanyl trafficking across the U.S. border.
President Trump said on his Truth Social platform that his conversation with the Mexican president was a “very friendly conversation wherein she agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States.”
Trump added that his 25% tariffs on Mexico would be paused for a month, “during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico. I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a ‘deal’ between our two Countries.”
Sheinbaum said that Mexico agreed to immediately reinforce the U.S.-Mexico border with 10,000 members of the National Guard “to prevent drug trafficking from Mexico to the U.S., particularly fentanyl.”
The U.S. agreed to work to prevent the trafficking of high-caliber weapons to Mexico, she said. “Our teams will begin working today on two fronts: security and trade,” Sheinbaum added.
“He insisted on the issue of the trade deficit that the U.S. has with Mexico,” Sheinbaum said. “I told him that in reality we had a trade agreement” that was the best tool “to continue competing against China.”
Towards the end of the telephone exchange, “he asked me how long I wanted tariffs to be on hold,” Sheinabum said. “Well, forever,” she responded.
Something’s Lost and Something’s Gained
This Mexican standoff could have easily happened without all the bravado. But Trump wanted to make it appear that Mexico backed down.
Trump achieved his macho-man goal, but at a high price. The price we pay is the world now understands Trump is willing to break any deal, even those he makes.
I do not know the cost of that, and you don’t either.
Short term we have a “Tie-Tie”. However, the long-term ramifications due to the lost of trust in honoring trade deals is undoubtedly “Lose-Lose”.
Pardo was 100 percent correct in her assessment “We had a trade agreement and that was the best tool to continue competing against China.”
By the way, how is Trump supposed to raise massive amounts of money from tariffs to reduce the deficit if all he gets is a “Tie-Tie”?
I will do a follow-up post on the insanity in believing tariffs can replace the income tax in raising money.
Related Posts
September 26, 2024: Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check.
Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How?
October 5, 2024: Buy American Provisions Cost $125,000 Per Job Created
“Buy America” sounds great. But it’s costly and about to rise steeply.
January 31, 2025: Seven Charts Show Tariffs Would Harm the US Auto Industry
The CATO institute does a great job explaining why tariffs on Canada and Mexico would be a very bad idea.