Mexican President responds to Trump's tariff threat

Mexican President Andrés Manuel López Obrador

said on Friday he would respond with “ great prudence ” to threats by his U.S. counterpart Donald Trump to impose tariffs on Mexican goods entering the United States, and called on Mexicans to unite to face the challenge.

Trump threatens tariffs on Mexican imports over illegal immigration

Trump says he will introduce punitive tariffs on June 10 if Mexico does not halt the flow of illegal immigration from Central America to the United States, battering Mexican financial assets and hurting stocks worldwide.

It is the biggest foreign policy test to date for President Andrés Manuel López Obrador , who during his six months in power has consistently sought to deflect Trump’s barbs and avoid embroiling himself in confrontations.

López Obrador predicted the Trump administration would rectify the tariff threat and said that Foreign Minister Marcelo Ebrard would be in Washington working to convince the U.S. government that Trump’s measures were in neither country’s interest and that Mexico was making progress containing migration.

Trump said on Thursday he would ratchet up tariffs unless Mexico stopped people from illegally crossing the border it shares with the United States. The plan would impose a 5% tariff on Mexican imports starting on June 10 and increase monthly , up to 25% on October 1 .

Speaking at his regular morning news conference, López Obrador said he believed Trump would understand that the tariff threat was not the way to resolve the matter , and stressed that Mexicans had united behind his government.

“I tell all Mexicans to have faith, we will overcome this attitude of the U.S. government, they will make rectifications because the Mexican people don’t deserve to be treated in the way being attempted,” López Obrador said.

Facing protectionism, Mexico should deepen its commitment to diversify trade relations

Exports to the United States of goods from avocados to cars and televisions are vital to the Mexican economy. Mexico sends around 80% of its exports to the United States .

Mexico’s main stock index fell more than 2%

after opening, and the peso currency was down 3% against the dollar.

Since taking office in December, López Obrador has urged Trump to help him tackle migration by promoting economic development in Guatemala , Honduras , and El Salvador , where most of the migrants apprehended on the U.S. border come from.

U.S. military interventions and “free trade” are behind migration in the Northern Triangle

A veteran leftist who won a landslide election victory in July 2018 , López Obrador has shied away from foreign policy entanglements, preferring to leave diplomacy to Ebrard.

Though López Obrador again stressed the need for diplomacy on Friday, he has in the past offered pointed criticism of Trump over migration policy. He was adamant that he had the support of Mexicans living both in Mexico and the United States.

In a letter responding to Trump’s announcement on Thursday, López Obrador called Trump’s policy of America First “ a fallacy ” and accused him of turning the United States into a “ghetto” that stigmatized and mistreated migrants .

Mexico

has yet to receive a reply to the letter, according to López Obrador, who said he would hold news conferences at the weekend about his government’s progress.

Trump’s tariff move rattled investors

who feared worsening trade friction could hurt the global economy.

sg