Mexico has been panicking every since Donald Trump launched his presidential campaign with a pledge to “build a wall and have Mexico pay for it.”
The Mexican economy relies heavily on the money illegal aliens working in the US send back to their relatives back home. If Trump cracks down on illegal immigration as promised, there goes billions of dollars a year in revenues.
Now the Mexican government has something else to worry about: Trump’s success in getting a number of American companies to suspend plans to move plants south of the border.
Peter Orsi reports for Associate Press:
Ford Motor Co.’s cancellation of plans to build a $1.6 billion auto manufacturing plant in San Luis Potosi has sounded alarms across Mexico. (…)
“Trump leaves Mexico without 3,600 jobs,” read the headline on El Universal. “Ford’s braking jolts the peso,” said Reforma, referring to the Mexican currency’s nearly 1 percent slump following the news.
Apparently that Mexican newspaper didn’t see the irony of complaining that America was costing Mexico jobs rather than the other way around.
Some in Mexico are trying to raise the alarm that the country needs to rethink the economic strategy it has relied upon through many American administrations, both Democratic and Republican:
Two weeks before inauguration, the scuttling of the planned Ford factory and Trump’s pressure on General Motors should be a “much-needed wake-up call,” said Mexico analyst Alejandro Hope.
Hope said more decisions like Ford’s are likely to come. And while the loss of a single planned plant probably does not fundamentally change the U.S.-Mexico economic relationship, “it certainly shows that the idea that the status quo was entrenched was false.”
“This should put us on notice that when he says that he wants to renegotiate NAFTA, he means it,” Hope said.
Nothing lasts forever. Just as it was shortsighted for American companies to think they could go on forever moving to “cheaper” countries, it wasn’t very smart of Mexico to think that the current set up could stay in place for all time.
Trump has made it very clear that there is “a new sheriff in town,” and everyone on both sides of the border has to take action accordingly.