The United States President Donald Trump’s decision marked a dramatic turnaround after he persistently criticized Mexico for failing to prevent Central American migrants from traversing the country to get to the U.S. The decision marks a victory for Mexican President Andres Manuel Lopez Obrador, whose administration had been pressing Trump to drop the tariff threat.
The deal preempts Trump’s planned 5% tariff on all Mexican imports to the U.S. that the president said could increase to 25% by October.
The decision was welcomed by Republicans and others who warned the tariffs would damage the American economy, hurt job growth and delay or altogether scuttle a trade deal between the U.S., Canada and Mexico, known as the USMCA, which still needs lawmaker ratification. Mexico is the second-biggest source of U.S. imports.
“Mexico came through,” said Senator Chuck Grassley, an Iowa Republican opposed to the tariffs, in a tweet soon after Trump’s announcement.
“I look forward to working with the administration and my colleagues in the House and Senate to pass USMCA without delay so that American companies and workers can reap the benefits of this updated and modernized agreement,” Representative Kevin Brady, a Texas Republican, said in a statement.
The joint statement released Friday said both sides would work together to “implement a durable solution.” Discussions will continue, they said.
The two countries said they’ll work to “to build a more prosperous and secure Central America to address the underlying causes of migration, so that citizens of the region can build better lives for themselves and their families at home.” The statement didn’t elaborate on how that would be accomplished.
Mexico said the deal was reached after several days of talks, including 12 hours of discussions on Friday.
Mexico’s foreign minister, Marcelo Ebrard, said the resolution was fair and balanced and that the U.S. originally had made more sweeping demands than were part of the final deal.
“We reached some middle point,” Ebrard said.
The tariff threat has rattled markets and prompted economists to forecast an increased risk of recession in the U.S., the world’s largest economy, because trade between the U.S. and Mexico is so integrated. An all-out trade war would lower global gross domestic product by 0.8% or $800 billion by mid-2021, according to Bloomberg Economics.
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.
Trump threatened the tariffs on May 30 -- the same day the administration sent a notice to Congress to try and kick-start passage of the USMCA, which Trump negotiated to replace the North American Free Trade Agreement. Vice President Mike Pence also spent that day stumping for the deal’s passage in Canada
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