An Awkward ‘Bromance’?: Mexico and the U.S.A.

On Friday, United States President Trump and Mexican President Enrique Peña Nieto met at the G20 summit in Hamburg, Germany. When asked who would pay for the proposed wall between the two countries, Mr. Trump said that ‘absolutely’ Mexico will pay. Of course, Mexican officials did not appreciate the word choice. President Nieto gave a murky response on Saturday, trying to avoid discussing Mr. Trump’s comments and focusing on positive relations between the countries.

The differing response of the two leaders and the recent history between the two countries begs the question: what will Mexican-U.S.A. relations be affected going forward? I argue that although the U.S.A. has significant advantages in the trade relationship, it will not proceed too hastily with radical changes. However, Mexico will alter its behavior, as President Trump’s election has upset its political system and many Mexicans are not satisifed with President Nieto’s handling of the issue. Furthermore, Mexico will diversify its trading relationship and will not be as dependent on the U.S.A.

Geopolitical Futures, one of my favorite sources, has a two part series analyzing the trade relationship between the two countries. Part 1 explores four key areas (oil and gas, steel, agriculture and the automotive industry) and concludes that the U.S.A. has the upper hand overall. However, part 2 points out that California, Arizona, New Mexico and Texas have significant cultural and economic ties with Mexico and will oppose action which will hurt their relationship with our southern neighbor.

While the U.S.A. has the advantage overall, these four states and Mexico itself will make enacting President Trump’s hardline agenda very difficult. Mr. Trump will have to modify his position to avoid alienating lawmakers and voters from this area of the country. With these two realities, it is unlikely the Trump administration will do anything too radical.

Returning to the border wall, there has not been much progress. NBC News reported on May 30th that the project was behind schedule. NBC has not been the kindest to Mr. Trump, but since hardcore Trumpeter Ann Coulter is quite disappointed as well, I trust their analysis to be accurate. Additionally, the wall could turn out to be more like a fence when finished. There are many unknowns and with serious issues such as North Korea rearing their head, I expect more delays with the wall.

On the Mexican front, PRI President Nieto is regularly criticized for not standing up to President Trump. This plays right into the opposition’s hands in the year before the election. One of the main contenders for the presidency, Andres Manuel Lopez Obrador, is a populist who has criticized Mr. Trump more forcefully than the current ruling party. The fallout between ordinary Mexicans and the current PRI regime could lead to a restructing of Mexican politics, where anti-Trumpism rules.

Mexico also wants and needs to be less dependent on the U.S.A. in 2013, the United States received 80% of Mexican exports. Talk about putting your eggs in one basket! Mexico has mulled over trade agreements and closer ties with China, European Union, Argentina and Brazil as of late. Of course some of these meetings and public statements are political posturing, but I predict that Mr. Trump’s policies and rhetoric, combined with the average Mexican’s dissatisfaction with their government and the elections in 2018 will force Mexican politicians to actually become less dependent on the U.S.A.

In sum, while the U.S.A. is the dominant player in the U.S.A.-Mexico trade relationship, it will not make radical changes in the near future due to interdependence with the Mexican market, especially concerning California, Arizona, New Mexico and Texas and other serious problems such as North Korea. On the other hand, Mexicans want to stand up to President Trump and may elect aggressive nationalist politicians, like Mr. Obrador. Finally, Mexico will diversify its trading portfolio, as it is far too dependent on the U.S.A. now.

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Originally published at on July 9, 2017.

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