Just last week, various news outlets reported that Mexico was working on a ‘contingency plan’
It seems much of the US population along with the polls and media were under the impression that Hillary Clinton was going to beat Trump and it seems Mexico’s government was under that same impression.
Just last week, various news outlets reported that Mexico was working on a ‘contingency plan’ in the event that Donald Trump was elected as the new President of the United States. Without providing specifics, the plan was stated to help minimize any negative economic impact of Trump’s election.
“If the adverse scenario manifests itself, it’s possible that Mexican authorities will respond in some way. It’s a contingency plan that we’re talking with the finance minister about.” stated Agustin Carstens, Mexico’s Central Bank governor in an interview with Milenio TV.
However, in a press conference with Carstens one day after election results were validated, he made it clear that Mexico’s financial authorities has no such contingency plan. A government press reléase stated that the economy has ‘stability’ and ‘fortress’ to deal with the current economic environment.
“The result of the election in the United States does not imply an immediate impact in the legal framework that regulates the trade in goods and services, or financial flows… besides, Mexico is in a strong position to face the new environment” mentioned José Antonio Meade, head of the Secretariat of Finance and Public Credit (SHCP).
During his campaign, Trump repeatedly threatened to slap a 35% tariff on goods made by U.S. companies in Mexico and sold in the United States. Exports make up one third of Mexico's economy and almost all of them go to the US. Trump also claimed that he will tear up NAFTA if it isn't renegotiated.
Conventional bipartisan thought is also being relayed by more wise and tenured leaders in both countries that neither of these threats will be easy for Trump to carry out. There are far more complexities to the interlinked US and Mexican economies, including millions of jobs on both sides to do something that irresponsible. Mexico’s former ambassador to the US – Arturo Sarukhan was quoted on CNN as saying: "It's a lose-lose proposition. The only losers will be the American and the Mexican peoples."
We agree with him.
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Having spent many years at KPMG as a partner and finally as Head of Corporate Finance, Midlands, Richard Boot currently chairs and holds directorship of various companies associated with staffing and recruitment. He is also a former board member of IRC Global Executive Search Partners.