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Trump Says ‘Not Nearly Enough’ Progress in Talks With Mexico

Bloomberg logo Bloomberg 6/6/2019 Josh Wingrove, Justin Sink and Anna Edgerton

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(Bloomberg) -- President Donald Trump said “not nearly enough” progress was made in talks with Mexico to mitigate the flow of undocumented migrants and illegal drugs, raising the likelihood that the U.S. will follow through with tariffs next week.

U.S. and Mexican officials wrapped up discussions on Wednesday at the White House and Trump said talks are set to resume Thursday.

“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule,” Trump tweeted Wednesday. “The higher the Tariffs go, the higher the number of companies that will move back to the USA!”

The peso fell more than 1% against the dollar as the currency reeled from the U.S. tariff threats and more pessimistic assessments from ratings companies. Moody’s Investors Service on Wednesday cut Mexico’s outlook to negative from stable, and then Fitch lowered the nation’s sovereign rating to BBB from BBB+.

A Mexican delegation, led by Foreign Minister Marcelo Ebrard, met at the White House for about 90 minutes with U.S. officials including Vice President Mike Pence, Secretary of State Michael Pompeo and Acting Homeland Security Secretary Kevin McAleenan. Trump, who’s traveling in Europe, wasn’t at the meeting.

Ebrard, in a press conference following the meeting, said they didn’t discuss the tariffs during the meeting but focused on migration. He added that he didn’t know how long negotiations would take.

“We are optimistic because we had a good meeting with respectful positions from both parts,” Ebrard said. “We had an opportunity to explain our point of view.”

Trump last month announced a 5% tariff on all imports from Mexico unless the country takes “decisive measures” -- as judged by his administration -- to stem migrants entering the U.S. He said the tariffs would begin June 10 and scale up incrementally until they reach 25% on Oct. 1. Mexico is the second largest source of U.S. imports after China.

Trump said earlier in the day he thought Mexico wants to reach an agreement. “I think they want to make a deal and they sent their top people to try to do it,” he said Wednesday in Ireland.

Ebrard highlighted some differences. While the U.S. is looking for measures to take effect “immediately,” Mexico wants to take steps that are longer term and “not just punitive.”

a screenshot of a cell phone: Counting the Costs

Counting the Costs
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The White House has so far been vague about what Trump, the self-avowed “Tariff Man,” expects Mexico to do to avoid the duties. But White House trade adviser Peter Navarro offered what appeared to be an opening salvo in negotiations earlier Wednesday, saying tariffs may not have to take effect if Mexico could meet three conditions, including keeping U.S. asylum seekers in that country.

“The most important thing is for the Mexican government to take the asylum seekers,” Navarro said in an interview Wednesday on Bloomberg TV in Washington.

The number of apprehensions and people denied entry along the U.S.-Mexico border has been rising steadily. More than 144,000 people were apprehended after illegally crossing the southern border in May or were refused entry to the U.S., Customs and Border Protection announced on Wednesday. That’s the the most in a single month in at least five years; the number has grown every month since January.

Most of the apprehensions are families or children traveling alone, pressuring a U.S. immigration system that has struggled to humanely detain and care for them.

The White House has said it’s an emergency and demanded that Mexico accept the asylum seekers, step up patrols of its own southern border and strengthen checkpoints along the route migrants travel.

Republican lawmakers have warned against the Mexico tariffs and are pushing for a deal. Senate Majority Leader Mitch McConnell said Trump should delay any tariffs until he can personally make his case to lawmakers.

The tariff threat also cast doubt on the future of Trump’s update of the North American Free Trade Agreement, a key accomplishment of his first term. The new trade pact, called the U.S.-Canada-Mexico agreement, was already at risk of stalling in Congress. The Trump administration wants it passed by summer.

Pence has previously failed to thread the needle when acting as the president’s surrogate in important negotiations. The vice president led talks with congressional Democrats earlier this year to end a government shutdown, only for Trump to tweet later that there was “not much headway made.” The government remained shuttered until Trump relented on his demand that Congress provide more money to build a border wall.

(Updates with Mexico’s currency in fourth paragraph.)

To contact the reporters on this story: Josh Wingrove in Washington at jwingrove4@bloomberg.net;Justin Sink in Washington at jsink1@bloomberg.net;Anna Edgerton in Washington at aedgerton@bloomberg.net

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Joshua Gallu, Kevin Whitelaw

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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