On course to become a menace, President Donald Trump’s vow to impose tariffs on Mexico looked set to destabilize the economies once again. However, the unlikely move to back off the plan, citing that the United States (US) has reached an agreement with Mexico to reduce the flow of migrants, saved the markets from tumbling. The President broke the news via Twitter, just hours after returning from Europe.
“I am pleased to inform you that the United States of America has signed an agreement with Mexico,” Trump tweeted Friday. “The tariffs scheduled to be implemented by the US on Monday, against Mexico, are hereby indefinitely suspended.”
Trump’s threat to impose tariffs on the US’ largest trading partner and one of its closest ally, brought the economies to a standstill. Already midst war with China, the forces of demand and supply have hugely shaken up the investors’ confidence. After the announcement of making peace with Mexico, companies across North America can once again look out for broader business prospects.
Meanwhile, it is believed that America’s dependency on Mexico could also be the reason why Trump might have dropped his idea of imposing the tariffs. The list of goods that begins with cucumbers and goes wide till refrigerators, explicates US’ dependency on imports from its neighboring ally. It is also suggested that Trump might have announced taxes only to get through his deal.
The tactic has been constant with Trump administration that has either announced sanctions or additional tariffs on majority of the oppositions. However, calls for imposition of tariffs on Mexico drew scrutiny even from his own party, including Senators, who billed that Trump’s move was naive and reckless.
The divide over tariffs also saw them warning to block the move, if the President pushed ahead to impose taxes without their approval.
Stating problem with immigrants, and the need for the longest ever border wall, Trump left no stone unturned while demanding funds for his border wall.
According to a US-Mexico Joint Declaration on Friday, Mexico has now agreed to “take unprecedented steps to increase enforcement to curb irregular migration,” including the deployment of national guards throughout the nation. This also includes making the migrants wait in Mexico, while their asylum claims are heard in the US.
“The United States looks forward to working alongside Mexico to fulfill these commitments so that we can stem the tide of illegal migration across our southern border and to make our border strong and secure,” Secretary of State Mike Pompeo said in a statement.
For now, the bottom line reads that another trade war has been averted. But, with a fact that there is no immediate clearance about the how US-Mexico agreement would be pursued, and how effective it would turn out.
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