Tariffs would hurt Mexico

Perhaps President Trump knows best, because tariffs against Mexico would hurt that country a lot. This is what they are reporting south of the border:

United States President Donald Trump’s proposed tariffs on Mexico could limit economic growth to 0.6% in 2025, financial services company Moody’s Ratings warned on Monday. 

“Our estimates indicate that the Mexican economy would lose around 1 percentage point of growth in 2025. We are estimating that Mexico would only grow 0.6% this year,” said Director of Economic Analysis for Latin America at Moody’s Analytics Alfredo Coutiño in an online conference Tuesday. 

On January 17, the International Monetary Fund predicted Mexico would see economic growth of 1.4% in 2025. The revised Moody’s forecast suggests growth may falter in the wake of U.S. tariffs causing trade to slow. 

Ouch, that hurts. To be fair, we'd be hurt too because Mexico exports a lot to the U.S. Texas, for example, does a lot of business with Mexico. On balance, Mexico would suffer more.

Are tariffs inevitable? Let's hope that the issue can be resolved.

Mexico can start by recognizing that it has a terrible national security issue with so many criminal elements ("crimen organizado" as they say) living in the neighborhood. These cartels (as we call them) terrorize local governments and journalists and have too much cash to spend.

Second, it can close the southbound border and stop all the guns and cash headed that way. Mexico complains that guns are going south but they do nothing about it. As for the cash, it gets washed in businesses and bribes politicians. Mexicans hate to hear that, but it's the truth.

Third, they can go back to a time when Mexicans controlled their southern border. Once upon not a very long time ago, Mexico had agents at bus stations stopping Central Americans and sending them home. Today, the word is out that you can travel to the U.S. border as long as you pay someone to take you there.

To be fair, the Mexicans are right that we are consuming the drugs. We should do better, but Mexico needs to understand just how damaging the open border is to them, too.

Maybe Mexico will accept some responsibility and sit down with the Trump administration to fix this border crisis. I hope so, because their economy will be devastated if the tariffs go through.

P.S. Check out my blog for posts, podcasts and videos.

Mexico flag.

Image: Pixabay

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