Posts Tagged ‘Mexico’

Pompeo says new Mexican government ‘great’ on immigration

December 12, 2018

U.S. Secretary of State Mike Pompeo on Wednesday praised the new government of Mexico on immigration issues and said the two sides have discussed the importance of stemming the flow of undocumented migrants before they get to the U.S. border.

“The incoming administration’s been great,” Pompeo said in an interview with Fox News, citing conversations about how to control traffic from Guatemala and Honduras along Mexico’s southern border. “We have to control that border that is ours and they have to control that border that is theirs.”

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Mexican President-elect Andres Manuel Lopez Obrador took office on Dec. 1. The next day, Pompeo met with Mexico’s incoming foreign minister, Marcelo Ebrard, to discuss border issues.

“We’re happy to support them. We’re happy to try and do the things we can do to help them,” Pompeo said in the Fox interview.

U.S. President Donald Trump has called the migrants’ effort to seek asylum in the United States an “invasion” and has deployed the military to the border to reinforce security measures.

He has reiterated his campaign promise to build a wall along the U.S.-Mexico border, even after Mexico repeatedly rejected his demand that it pay for the billion-dollar project.

Funding for the border wall has been a sticking point in spending bills before the U.S. Congress, and Trump clashed with leading Democrats over the issue during an Oval Office meeting on Tuesday.

Pompeo said he supports the effort to build a wall.

“We have to have the capacity to control entry to our country everywhere,” he said. “And a wall is a vital component of that.”

Reporting by Doina Chiacu; Editing by Chizu Nomiyama and Steve Orlofsky



US steel industry booming after Trump’s tariffs — But Chamber of Commerce issues a warning

December 11, 2018

U.S. steel mills have seen almost a 5 percent jump in shipments so far this year, a sign that it’s benefiting from stiff 25 percent tariffs on imports the Trump administration imposed last year.

The American Iron and Steel Institute reported Monday that U.S. mills shipped 8.1 million tons in October, up 4.6 percent from the previous month and up 6 percent from the same period last year. So far this year, the industry has shipped 79.6 million net tons, 4.6 percent more than it had by this point last year.

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AISI spokesman Jake Murphy told the Washington Examiner that domestic steel use has increased 1.4 percent so far in 2018, and that “Section 232 has played a crucial role as well,” referring to section of trade law used by the Trump administration to justify the tariffs.

According to U.S. Census Bureau data, U.S. imports of steel mill products declined 11 percent during the first 10 months of 2018 compared to the same period in 2017.

But while U.S. steel manufacturers are expanding, some in the business community have said the steel tariff and a 10 percent tariff on aluminum were hurting the broader economy. Chamber of Commerce President Tom Donohue on Monday called on the White House to restore tariff exemptions that Canada and Mexico had earlier this year.

“Every week that the tariffs remain in place, $500 million in U.S. imports and exports are affected, inflicting significant harm on American workers, farmers, and ranchers. They must be eliminated without delay,” he said.

Many U.S.-bound caravan migrants disperse as asylum process stalls

December 8, 2018

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Thousands of Central American migrants spent weeks traveling north through Mexico in caravans, walking and hitching rides when possible, only for many to give up hope and turn back when they met resistance at the U.S. border.

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Others hopped the border fence, often directly into the hands of immigration authorities on the U.S. side, while still others dug in at temporary lodgings in Tijuana for the long process of seeking asylum from a reluctant U.S. government.

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As rain poured down on a former music venue in Tijuana that holds a diminished crowd of 2,500 migrants, Jessica, 18, grabbed her feverish 1-year-old daughter and took her inside to a friend while she figured out what to do with her broken tent.

Jessica had traveled from El Salvador, and said she and her husband were waiting in the Barretal camp for the right moment to try to cross the border illegally.

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Barretal camp

“Getting asylum is really difficult,” she said. “They ask you for a lot of evidence and it’s impossible. It’s not like they say it is.”

Other migrants face the same dilemma. Of 6,000 who arrived in Tijuana in the caravans last month, 1,000 have scrambled over border fences, and most of those were detained, the head of Mexico’s civil protection agency David Leon told local media on Wednesday.

A further 1,000 have accepted voluntary deportation, he said, while others are living on the street outside the municipal sports center where they first arrived, or in smaller shelters. The director of the Barretal camp, Mario Medina, said he expected hundreds more to arrive within days.

U.S. President Donald Trump has sought to make it harder to get asylum, but a federal court last month placed a temporary restraining order on his policy that only permitted asylum claims made at official ports of entry.

Under former President Barack Obama a system dubbed “metering” began, which limits how many can ask for asylum each day in Tijuana. Lawyers say Trump is using the system more aggressively to stem the flow at the port of entry.

A U.S. Customs and Border Protection (CBP) spokeswoman said the agency works with Mexico and charities to manage the flow, but denied that people were being prevented from making asylum claims.

Mexico’s National Immigration Institute, which did not respond to requests for comment, has said in the past it protects migrants rights, while respecting other countries’ immigration policies.

Looking after the large groups of Central Americans is a challenge for Mexico. New President Andres Manuel Lopez Obrador has vowed to issue more work visas and on Friday pledged to do more to improve conditions at the Barretal shelter.

His government is in talks with Washington about an immigration plan, including a U.S. proposal to make asylum seekers stay in Mexico until their claim is decided, a process that can take years. Some believe that would deter people from seeking refuge.

Despite the wait, more people are adding their names to the semi-formal asylum list. Created a couple of years ago around the time an influx of Haitians arrived in Tijuana seeking to enter the United States, it has been challenged in a U.S. lawsuit that claims it deliberately delays asylum seekers.

Migrants put their names in a black-and-white ledger, controlled by around eight migrant volunteers. Those on the list are given a number and must wait months to pass through for an interview. The list contains thousands of names from around the world.

Each day, CBP officials communicate with Mexican immigration officials who then tell the migrants how many can go through, according to volunteers, who spoke on the condition of anonymity. They said between 40 and 100 per day are usually sent.

At the end of each day, Mexican immigration officials guard the ledger. Lawyers have cited multiple problems with this system. For instance, they have said, some people on the list could be Mexicans fleeing the federal government.

Some migrants expressed distrust of the list. Honduran Anabell Pineda, 26, said she thought the process was not for her as she left behind a daughter in Honduras.

“They say, though I don’t know, that asylum is for people that don’t want to go back to their country, and I do want to go back,” she said.

Pineda, traveling with her son, said that once she gets her paperwork, she plans find a job in Mexico City.

Pineda has applied for a humanitarian visa that will get her a work permit in Mexico, a better bet than trying to get to the United States, she said.

“It’s really difficult to cross, because of what happened last time. I don’t want to put my children in danger,” she said, referring to disturbances in which U.S. officials launched tear gas at migrants last month.

At a jobs fair set up by the federal Labor Ministry, coordinator Nayla Rangel said more than 3,000 migrants, mainly from the caravan, had job interviews.

Rangel said there were more than 10,000 jobs open in the state of Baja California, with salaries around 1500 pesos ($74) per week. For many migrants hoping to send money to families in Central America, that likely would not be enough.

Reporting by Christine Murray; Editing by Daniel Flynn, David Gregorio and Tom Brown


U.S. Companies Feel the Pinch as Tariff Costs Start to Mount

December 7, 2018

American companies that import products are paying record amounts in customs duties as more tariffs imposed by the Trump administration take effect.

Tariff collections topped $5 billion in October, according to data from the Treasury Department and from Census Bureau data analyzed and released by Tariffs Hurt the Heartland, a lobbying coalition of manufacturing, farming and technology groups.

President Trump campaigned on an aggressive trade agenda, and from early this year has imposed or considered tariffs on thousands of products from dishwashers to semiconductors. U.S. revenue from tariffs has begun to build rapidly only in the last few months, as more of the levies have taken effect.

The amount of tariffs being paid by U.S. importers has doubled since May, including an increase of more than 30% from August to October, according to the data. The sum has risen through the year as steel and aluminum tariffs were applied to imports from a growing group of countries, then surged in October, which was the first full month in which U.S. tariffs were in place on a full $250 billion of imports from China.

Trade, Tech and Tweets: Stock Markets May Get Even Bumpier in 2019
U.S. stock markets have gyrated this week with seemingly positive news on trade followed by President Trump tweeting he is still a “Tariff Man.” U.S.-China tensions, plus worries about economic growth and the tech sector, spell more volatility ahead for investors. Photo Composite: Crystal Tai

China and the U.S. struck a trade truce Dec. 1, agreeing not to add or increase tariffs for now. But the tariff rates in place in October will remain in effect, meaning collections are likely to remain high in November and December.

President Trump has touted the surge in revenue his tariffs have brought in thus far. “We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN,” he said in a tweet on Tuesday.

Tariffs are assessed to the U.S. importer of record, meaning U.S. companies that import items from China and the rest of the world directly are the initial parties responsible for paying. The Census Bureau data are based off customs filings, while the Treasury data are based off actual payments.

While some importers will bear the cost of the tariffs themselves, others may be able to persuade their foreign suppliers to cut prices enough to offset the cost and others may pass the higher costs on to their customers.

“We are now seeing the raw data behind the stories of tariff pain that are coming in from every corner of the country,” said Charles Boustany, a former Republican congressman who is the spokesman for Tariffs Hurt the Heartland. “American businesses, farmers, manufacturers and consumers are suffering under the weight of the current tariffs and are reeling from the continued uncertainty over whether they will be increased even further.”

Russell Tiejema, the chief financial officer of Masonite International Corp., a Tampa, Fla. manufacturer of doors, said at an investors’ conference this week that U.S. tariffs would hit about 10% of the $900 million worth of material his company acquires to build its products.

“About half of that, we would be the importer of record, which means that we would be the party liable for tariff remittance,” said Mr. Tiejema. “The other half we acquire from other suppliers who then acquire it upstream from China, but they stand as the importer of record. In both cases, we need to negotiate, wherever possible, price concessions.”

Many U.S. companies are also facing retaliatory tariffs from China—and from Canada, Mexico, the European Union and other countries hit by U.S. tariffs this year on steel and aluminum. Data from the research group the Trade Partnership, which works with Tariffs Hurt the Heartland to assess the impact of tariffs, estimate that more than $1 billion in tariffs were paid on U.S. exports in October, based on the volume of trade of affected goods.

John T.C. Lee, the president of Andover, Mass. MKS Instruments, which makes precision measuring instruments, said at a Nasdaq Investors Conference this week that his company was facing both U.S. tariffs and retaliatory tariffs from other countries. MKS faces $3 million in tariffs on its imports over a year, and $7 million in tariffs on its exports, he said.

“That is most likely going to be borne by the customers,” he said, noting that many had no other options for getting those products, a situation that gives his company more leverage to raise prices.

Even after the recent increase in revenue from tariffs, they account for a small share of government income. Tariffs were the primary source of federal revenue before World War I, but that share has dwindled with the introduction of the income tax and the liberalization of trade. In October, more than 2% of federal receipts came from tariffs, the most in at least two decades.

Write to Josh Zumbrun at

Mexico’s New President Launches “Transformation” of Mexico

December 4, 2018

Announces a commission to investigate the internationally condemned disappearance of 43 students in 2014

Newly installed President Andres Manuel Lopez Obrador launched his “transformation” of Mexico Monday with a return to presidential press conferences and a commission to investigate the internationally condemned disappearance of 43 students in 2014.

The anti-establishment leftist known as AMLO, who assumed the presidency Saturday, got down to business with a 6:00 am meeting with his public-security team, followed by a 7:00 am press conference — something his predecessor, Enrique Pena Nieto, habitually avoided.

© Pedro Pardo / AFP (file photo) | Protesters march in Acapulco, on October 17, 2014, to demand answers over the fate of 43 missing students

He then signed a decree creating an investigative commission to unravel the unsolved case of the missing students, a stain on Pena Nieto’s legacy.

“I promise you there will be no impunity, not in this terribly sad and painful case, and not in any other,” Lopez Obrador said at a ceremony where the students’ parents were present.

Mexico is still haunted by the disappearance of the 43 student protesters from the Ayotzinapa teachers’ college in the southern state of Guerrero.

They were attacked and then detained by municipal police in the city of Iguala on September 26, 2014.

According to the official investigation, corrupt police then handed them over to hitmen from the Guerreros Unidos drug cartel, who killed them and burned their bodies at a garbage dump.

However, independent investigators found numerous holes in the official story — including a lack of forensic evidence at the supposed crime scene and indications that many of the suspects were tortured into confessing.

Trump’s ‘respect’

Lopez Obrador’s nearly hour-long press conference touched on a wide range of issues. But the biggest news may have been the event itself.

It was a dramatic departure from the style of Pena Nieto, who read out scripted statements to the press on a semi-regular basis but almost never took questions from journalists.

“We are going to guarantee the right to information,” Lopez Obrador, 65, told a room packed with reporters.

“We’re at your disposal to answer your questions. There are no limits, no censorship… The media are instruments to keep the people informed.”

The former protest leader and Mexico City mayor said both the early-morning press conference and meeting with his public-security team would be daily rituals, calling the record-breaking violence fueled by Mexico’s drug cartels “the issue that most worries Mexicans.”

He also repeated his statement that he has a “respectful” relationship with US President Donald Trump, and called for a deal in which the United States would invest in economic development in Mexico and Central America to stop the flow of migrants across the US-Mexican border.


Trump for his part is pressuring Mexico for a deal to keep asylum-seeking migrants on its side of the border while their claims are processed, a possible source of tension between the two leaders.

But they have gotten off to a warm start so far — and Trump again tweeted his congratulations.

Lopez Obrador “had a tremendous political victory with the great support of the Mexican People. We will work well together for many years to come!” he wrote.

Economic worries

Lopez Obrador also touched on his controversial decision to cancel a new $13-billion airport for Mexico City that was one-third complete, saying bonds from the project would be repaid.

He said he would give further details in Tuesday’s press conference after meeting with his finance minister, Carlos Urzua.

Criticized by opponents — especially in the business world — as radical and authoritarian, Lopez Obrador has triggered fears about the future of Latin America’s second-largest economy after Brazil.

In the latest report from the central bank, a panel of independent economists revised down their forecast for Mexico’s economic growth next year, from 2.2 percent to 1.9 percent.

Lopez Obrador won a landslide victory in the July 1 elections promising sweeping change in a country fed up with corruption and crime after 89 years of government by the same two parties.

Vowing to lead his anti-corruption, pro-austerity push by example, he has cut his own salary by 60 percent and forsworn the presidential residence, security detail and jet.

The latter was flown to California Monday to be refitted and sold.


Opinion: G20 teetering on the edge of the abyss

December 2, 2018

Leaders of the world’s top economies have agreed on a joint statement after marathon talks and staunch resistance from the United States. The G20 has long been in trouble, writes Bernd Riegert from Buenos Aires.

World leaders at the G20 summit

Ten years after its founding at the level of heads of state and government, the Group of 20 is clearly on the wane as a forum for solving global problems. Set up in 2008 to regulate spiraling financial markets in the midst of a striking crisis, the G20 format has managed to survive. It’s not that the idea of finding global solutions to global problems is a bad one, the difficulty is that many of those at the negotiating table have lost the political will to find such answers. Isolation, nationalism and protectionism have increased following the financial crisis as the alleged consequences of globalization that has widely been perceived as unbridled.

The leader of this movement is undoubtedly the haphazard US president, Donald Trump. He is an avowed deconstructivist — someone who wants to tear down the existing order because he doesn’t think it works in his favor. He simply makes new rules for himself that only apply to him. All that counts is quick, popular success at home, nevermind the rest of the world.

Bernd Riegert


By Europe correspondent Bernd Riegert

But Donald Trump — and here’s the crucial point — is not alone.

Read moreOpinion: G20 — go back to the roots

It gets worse

The Russian president, the Saudi crown prince, the Turkish autocrat and the Chinese president at the G20 table don’t have much respect for law and justice. And there are more and more representatives joining the “My country first” club. In Mexico, a populist has just taken office. In Brazil, a professed right-wing radical will be moving into the presidential palace come January. These changes don’t bode well for the next G20 summit in Osaka, Japan.

It’s gradually becoming a lonely struggle for the German chancellor, the Canadian prime minister, the French president and EU representatives — those who held up the flag of multilateralism in Buenos Aires.

Even within the EU, populism and isolationism are spreading. After Brexit, the most recent example of this shift is the populist government in Italy.

Read moreG20 summit opens as leaders give Saudi prince mixed reception

Reading the thin communique adopted by G20 members, it appears that this assembly representing two thirds of humanity is little more than an empty shell. Admittedly, the leaders did commit to reforming the international trade system. But in the meantime, members of the G20 impose punitive tariffs on each other in an attempt to get a bigger piece of the global economic pie. There’s certainly a wide gulf between theory and practice.

Is the end nigh?

Trump may soon be the death of the G20, a summit whose plenary meetings he only occasionally took part in. As far as his obsessive security adviser is concerned, the forum is redundant, despite it being the only economically relevant steering committee at the global level. It’s difficult to explain to the public and voters at home, if there are any, what the G20 is good for when there is a growing number of insolent lone fighters sitting around the table.

Read moreAngela Merkel to miss start of G20 summit after plane’s technical difficulties

To date, the G20 hasn’t even managed to do its quintessential job — namely, to regulate the global taxation of digital companies. In Buenos Aires, fair taxation was once again postponed, at the insistence of the United States, until the summit after Osaka, should it still take place. Downgrading the G20 to the ministerial level, like it was before 2008, or getting rid of it altogether, would be handing a victory to the nationalists that should not be granted. Perhaps the summit will continue in the coming years, but the G20 could easily become a “dead man walking,” condemned to political execution.

US hopeful that Trump-Xi dinner will lead to trade war ceasefire

December 1, 2018

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Officials discuss holding further talks in Washington in December if deal is agreed — A ‘positive feel’ is expected when Presidents Xi Jinping and Donald Trump meet on Saturday, according to US trade representative Robert Lighthizer © AFP

By James Politi in Buenos Aires and Tom Mitchell in Beijing

Donald Trump said there were “good signs” emerging from negotiations with Chinese officials over a possible deal to ratchet down the trade war between the world’s two most powerful economies, offering hope that a ceasefire was at hand. “We’re working very hard. If we can make a deal that’d be good. I think they want to, I think we’d like to,” the US president said ahead of a bilateral meeting with Shinzo Abe, the Japanese prime minister, on Friday.

“There’s some good signs. We’ll see what happens,” he added. Mr Trump’s remarks came ahead of a highly anticipated working dinner with Xi Jinping, the Chinese president, which was set up to attempt to defuse months of mounting tensions and tit-for-tat tariffs.

A positive tone to the day had already been set earlier by Robert Lighthizer, the US trade representative who is one of the more hawkish officials on China in the US administration. He said he would be “very surprised if the dinner was not a success” and said there was a “positive feeling” between the presidents.

“I I know the president likes President Xi. I believe that it is reciprocal. So there will be a good discussion,” Mr Lighthizer. Even though Mr Lighthizer is considered pivotal to any deal, he said the fate of the talks was “entirely up to the president of the United States and the president of China, and way, way, way above my pay grade”.

According to three people familiar with the preparations, officials from both countries trying to craft a compromise have already discussed holding a further round of trade talks in Washington in December if Mr Xi and Mr Trump agree to a deal this weekend.

The people said that if the presidents can reach a truce, Beijing’s top trade negotiator, vice-premier Liu He, would lead a delegation of 30 Chinese officials to the US capital on a mission tentatively scheduled for December 12-15. The two sides remain far apart on several critical issues as the presidents prepare to meet on the sidelines of this weekend’s G20 leaders’ summit, in what will be their first face-to-face encounter in more than a year.

Mr Trump has threatened to raise the tariff rate imposed on about half of all Chinese exports to the US from 10 per cent to 25 per cent in January — and slap tariffs on all remaining Chinese exports if there is no deal in Buenos Aires.

Mr Lighthizer’s comments came just ahead of the beginning of the summit’s formal sessions and following Mr Trump’s signing of an agreement with Mexico and Canada to overhaul Nafta, the 1994 pact governing trade in North America. Mr Trump was also expected to hold a bilateral meeting with Narendra Modi, the Indian prime minister, on Friday.

But the China talks remained the biggest item on his agenda. According to the people briefed on the preparations for Saturday’s dinner, Mr Liu’s December trip would go ahead if Mr Trump agreed to a pause in any further tariff measures in return for the Chinese government’s willingness to negotiate possible changes to its industrial policies.

Recommended Analysis Trade disputes Gulf between US and China looms large ahead of G20 meeting

Mr Xi’s administration has been reluctant to alter “structural” policies such as Made in China 2025, which seeks to challenge US dominance in areas such as semiconductors, or make changes to how it controls and funds large state-owned enterprises. US officials had in fact expressed disappointment with Beijing’s overtures so far.

But Chinese officials have recently indicated that they would be willing to discuss such issues if there was a pause in tariff increases. Mr Liu has not engaged in any face-to-face talks with Mr Trump’s trade negotiators, who are led by Steven Mnuchin, the Treasury secretary, since May when the president decided to proceed with tariff rises on Chinese exports to the US.

The two sides came close to holding an additional round of talks between Mr Liu and Mr Mnuchin in late September but Chinese officials backed out after Mr Trump announced further tariff measures on September 18. Mr Liu wrapped up an official visit to Germany on Wednesday before arriving in Buenos Aires. Mr Trump’s trade assault on the world’s second-largest economy has come at a difficult time for Mr Xi and Mr Liu, whose campaign against excess leverage and risky financial practices has led to a slowdown in economic growth.

In October China’s National Bureau of Statistics reported its lowest quarterly growth figure, of 6.5 per cent, in a decade.

Trump Sees “Good Signs” for Trade Deal With China

December 1, 2018

 President Trump suggested his Saturday showdown with Chinese President Xi Jinping could produce a cease-fire in the tariff war, capping a day that saw the American leader reach a milestone in his populist economic crusade by signing a regional trade deal with Mexico and Canada.

The president struck a notably more upbeat tone about prospects for his dinner meeting with Xi, scheduled for Saturday evening in a downtown hotel following the annual Group of 20 leaders summit. “We’re working very hard. If we can make a deal, that’d be good. I think they want to; I think we’d like to. And we’ll see,” the president told reporters, adding: “There’s some good signs.”


Speaking before a meeting with Japanese Prime Minister Shinzo Abe, the president did not elaborate. But earlier Friday, the architect of Trump’s hard-line ­approach to China, chief trade negotiator Robert E. Lighthizer, previewed the more optimistic stance.

“I would be very surprised if the dinner is not a success. . . . I’m sure at the end there will be a positive feeling by both men,” Lighthizer told reporters after Trump joined Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto in signing the United States-Mexico-Canada Agreement.

Such official optimism, following months of on-again, off-again bargaining, makes it likely that the president will emerge from the dinner with a tangible achievement. But no one expects a sweeping agreement that resolves all of the irritants in the U.S.-China relationship.

One potential bargain would involve the United States deferring further tariff increases in return for China dropping its retaliatory levies on shipments of American soybeans and liquefied natural gas, according to Derek Scissors, a China expert at the American Enterprise Institute who occasionally advises administration officials.

The two presidents also could agree to deputize officials for new negotiations over the most contentious U.S. charges, which go to the core of China’s state-led economic model. The U.S. Chamber of Commerce has proposed talks with a six-month deadline to reach a deal that would eliminate tariffs and provide American companies greater access to the Chinese market.

“Trump clearly wants to be seen as tough on China, but also as an effective dealmaker,” said Eswar Prasad, a Cornell University economist and former International Monetary Fund China division chief. “It is unlikely that the substantial differences between the two sides can be bridged anytime in the near future, but even a cessation of additional trade hostilities would be a positive outcome at this stage.”

After earlier talks led by Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin failed, the Chinese want to see Lighthizer deputized to lead a renewed dialogue.

“The Chinese now no longer believe anyone else can deliver,” said Douglas Rediker, executive chairman of International Capital Strategies, a market advisory firm.

Even as the outlook brightens for the Trump-Xi dinner, the long-run picture looks darker.

Administration officials regard China as an economic predator, a hostile power that seeks to undermine American technological supremacy and unseat Washington as the globe’s dominant power.

The United States complains that Beijing subsidizes its state-owned giants to compete in world markets, steals American technology and maintains strict limits on foreign businesses in China. Officials in Beijing and Washington speak openly of prospects for a new “Cold War” between the two countries.

“I am quite confident that a year from now the cooperative results finalized tomorrow will be evaporating and 2020 will be more contentious than this year,” Scissors said via email.

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The president spent the first part of this week playing down chances for an accommodation with China. He told the Wall Street Journal it was “highly unlikely” he would cancel a planned Jan. 1 increase to 25 percent from 10 percent in tariffs on $200 billion worth of Chinese imports.

National Economic Council Director Larry Kudlow, a self-described free-trader, also spoke skeptically, saying China’s responses to U.S. trade complaints had been “disappointing” and “unsatisfying.”

But as the dinner with Xi drew closer, Trump began emphasizing the potential for progress, however limited.

For the president, the day’s signature moment came with the morning’s ceremonial signing of a North American trade deal that overhauls the rules governing more than $1.2 trillion in regional commerce and closes the door on a quarter-century of unbridled globalization.

In a half-hour ceremony, Trump lavished praise on the agreement, calling it a “truly groundbreaking achievement,” and he nodded to his blue-collar base with claims that the measure would promote “high-paid manufacturing jobs” and farm exports.

But the pact faces an uphill battle in Congress next year, where Democrats will control the House and may be reluctant to help the president fulfill a 2016 campaign promise as he gears up to run for reelection.

Major U.S. industries and agricultural interests are also unhappy that the president has not yet removed tariffs on steel and aluminum imports from Mexico and Canada, as administration officials promised.

“That’s bad news for a lot of us,” said Rufus Yerxa, president of the National Foreign Trade Council, which represents multinational corporations.

Lighthizer is seeking to replace the tariffs with quotas that will limit metals shipments from the two U.S. trading partners.

Canada and Mexico also fear being hurt if Trump follows through on his threats to impose tariffs on imported automobiles. The auto industry is perhaps North America’s most integrated business, with companies shipping parts and half-finished cars across the U.S. northern and southern borders multiple times before completing production.

Friday’s ceremony was relatively subdued, save for Trump’s acknowledgment that the trio had done “battle” to reach an accord. Trump and Trudeau, whose relationship has been rocky, interacted cordially, though the Canadian resisted Trump’s rebranding effort and called their handiwork a “new North American Free Trade Agreement.”

Trump was accompanied by a large U.S. delegation, including Secretary of State Mike Pompeo, Mnuchin, Lighthizer, national security adviser John Bolton and White House Chief of Staff John F. Kelly.

The president’s daughter Ivanka and her husband, Jared Kushner, both senior White House advisers, also attended. Minutes earlier, Peña Nieto had awarded Kushner the Mexican Order of the Aztec Eagle, the country’s highest award for foreigners, in part for his work on the trade deal.

The measure faces opposition in Congress, despite Trump’s breezy assertion Friday that “it’s been so well reviewed I don’t expect to have very much of a problem.”

In the Senate, Sen. Patrick J. Toomey (R-Pa.), who backs expanded trade, says he will oppose the deal unless changes are made to several provisions, including protections for investors. Sen. Elizabeth Warren (Mass.), a likely Democratic presidential aspirant, said Thursday that she would oppose the trade pact.

In a worrisome sign for the administration, major labor unions, fearing additional outsourcing, are refusing to back the pact. Robert Martinez, international president of the International Association of Machinists and Aerospace Workers, said the USMCA “will do little, if anything,” to keep more American jobs from moving to Mexico.

Lighthizer, who spent 13 months in sometimes acrimonious bargaining, ruled out trying to rework the agreement to reflect lawmakers’ concerns.

“The negotiations are not going to be reopened. The agreement’s been signed,” he said.

Lighthizer said he “absolutely” believes the bill will get support from “a very high number of Democrats.” “I have no doubt about it.”

The president has repeatedly called NAFTA “the worst trade deal ever” and came close to withdrawing the United States from it within months of taking office.

Vows to scrap NAFTA and replace it with a better deal also were staples of Trump’s campaign rallies across the industrial Midwest in 2016.

The agreement requires that 75 percent of each vehicle granted duty-free treatment be made in North America, up from 62.5 percent in the current treaty, and requires a substantial amount of manufacturing be performed by workers earning at least $16 per hour.

That measure is designed to reduce incentives for American work to shift to lower-cost Mexican factories.

The deal also contains new provisions governing e-commerce and cross-border data flows that were not part of the earlier treaty, which was negotiated before the Internet became a commercial force.

Trump and Xi Have Much More on Their Plate Than Trade

December 1, 2018

The two nations are heading for a great-power conflict it will take cool heads to avoid.

We could use more of this.  Photographer: JIM WATSON/AFP/Getty Images

Today’s Agenda

Let’s keep those guys in the background strictly ornamental.
Photographer: Thomas Peter-Pool/Getty Images AsiaPac

Trump, Xi to Share Beef, Beefs

We wrote earlier this week that a lot is riding on President Donald Trump and Chinese President Xi Jinping’s dinner this weekend over what we can only imagine will be charred Argentinian beef. We didn’t really express then just exactly how much is at stake.

As John Mickelthwait notes, China and the U.S. seem to be stumbling toward the sort of great-power/rising-power conflict that has sparked major wars in the past, from the Peloponnesian to the World ones. But history is not destiny, John writes; cooler heads could have prevented World War I, and they may yet avert a China-U.S. war. Cool heads seem to be in short supply in the Trump administration, which has mostly approached China with belligerence so far. Xi and the Chinese have made mistakes too; but they seem to be learning on the fly and making smart, conflict-avoiding choices, John writes. Trump may not give much ground at tomorrow’s dinner, but there’s reason to hope Xi has learned the lessons of history and will be patient: “The rising power that waits is the one that probably wins.” Read the whole thing.

Mohamed El-Erian is fairly optimistic the Trump-Xi dinner will be constructive. He reckons both sides realize the economic benefits of lowering trade tensions. The trouble, though, is that this fight is about much more than economics. National security issues and domestic political considerations for both men could make a deal less likely.

Further China Reading:

  • Barack Obama got Xi to sign a cyber-espionage pact using a free-trade argument. Trump’s protectionism has undermined that, making it easier for China to justifying spying again. Trump needs to give some on tariffs if he wants China to stop. – Noah Feldman 
  • In China, spying and data collection are the job of government; Beijing has made it clear companies should back off. – Tim Culpan 

iPhones and Big Macs Have the Same Problem

Apple Inc. and McDonald’s Corp. have two big things in common, note Sarah Halzack and Shira Ovide: They both sell stuff to people. And they both are having trouble finding more people to buy their stuff. This chart puts Apple’s problem in perspective:

And this one is for McDonald’s (and Starbucks Corp. and Chipotle Mexican Grill Inc., etc.):

As you can see from both charts, these consumer companies are still wringing revenue out of a stagnant or shrinking customer base. And as you can see from, uh, common sense, this isn’t sustainable for the long term. Sarah and Shira write consumer companies are having to get creative in response. Read the whole thing.

Brexit’s Costs Add Up

Based on a growing pile of economic data and studies, Theresa May’s Brexit plan increasingly looks like it will be an economic dumpster fire, compounding the damage Brexit has already done so far, Bloomberg’s editorial board writes. Brexit anxiety is already doing a Grinch to British retail this holiday season, notes Andrea Felsted. No wonder nobody likes this deal, either on the leave or remain side. It basically amounts to lopping off chunks of the economy in exchange for controlling immigration – a dubious “win” in the first place in an aging population, Bloomberg’s editors write. The best option for Britain at this point is still  a do-over Brexit referendum – this time with more data and information.

There is a chance this can all end on a non-disastrous note, offers Lionel Laurent – a compromise or another referendum, or at the very least a worst-case-avoiding Theresa May deal getting passed. Currency markets may yet be too gloomy, Lionel suggests.

There’s pessimism in the long-date end of the U.K. bond market, too. Marcus Ashworth suggests this is a sign traders fear Brexit chaos will lift Jeremy Corbyn to power, where he will immediately spend a bunch of money.

Better Know an AMLO

Tomorrow, Andrés Manuel López Obrador (hereinafter “AMLO”) will become Mexico’s new president, and markets are not happy about it, given his leftist and populist leanings. John Authers was a reporter in Mexico City while AMLO was mayor there; and based on his experience, he thinks everybody should calm down and give AMLO a chance. He’s a pragmatic deal-maker and skilled retail politician who is also sometimes a little too micro-managing and populist for anybody’s good, John writes. Backing him into a corner – as Trump sometimes seems intent on doing – could make his worst instincts come to the fore.

Shannon O’Neil is far less sanguine, warning AMLO will reverse the big strides Mexico has made in recent decades to strengthen its democratic institutions and economy. One specific institution AMLO threatens is an independent legislature. He has a habit of holding referendums on controversial topics, which takes power out of the hands of Congress (which is run by his party right now anyway). These votes always seem to go AMLO’s way, another troubling sign, according to Latin American expert Jennifer Piscopo, in an interview with Jonathan Bernstein. Read more of her thoughts on what AMLO means for troubles on the U.S. border, the new NAFTA deal and more.

Telltale Charts

Where is the rent too damn high? It’s not always the places you’d expect, writes Justin Fox.

Corporate stock buybacks aren’t bad, but you’ve got to watch out for companies that go to the well too often, writes Barry Ritholtz.

Further Reading

Trump is losing his sway with over Republicans at just the wrong moment. – Jonathan Bernstein 

The Democrats’ path to the presidency runs  through the suburbs. – Conor Sen

Threatening to stop U.S. involvement in Yemen punishes the U.S. more than Saudi Arabia. – Eli Lake 

To boost wage growth, we’ve got to boost economic growth. – Noah Smith

Mark Zuckerberg is right: Fake news is too big for any one company to fight. Crowdsourcing is a better approach. – Kara Alaimo

Americans’ preference for big cars might seem to be a problem for the uptake of electric vehicles; fortunately, electrified trucks and SUVs are on the way. – Nathaniel Bullard

It’s much, much harder than you think to bioengineer perfection. – Faye Flam 


Acting Attorney General Matt Whitaker dragged his feet after hearing complaints about the patent company he advised. A magnitude 7 earthquake hit southern Alaska. Marriott International suffered a massive data breach affecting 500 million customers. Art belongs in the bathroom.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Caravan migrants in Mexico fill new border shelter after rains force exodus

December 1, 2018

Hundreds of mostly Central American migrants poured into a new shelter on Friday as bus loads fled a filthy, flooded sports complex on the eve of a presidential inauguration in Mexico that could recast the border crisis with U.S. President Donald Trump.

Earlier in the day, streams of migrants laden with heavy backpacks, tents and blankets, much of it soaking wet, loaded buses leaving their original migrants shelter within sight of the border.

Helicopters swooped down nearby a few times and lines of people formed quickly when bottles of water were passed out. Diapers and milk for children were also distributed.

For those among the at least 6,000 migrants who have descended upon the Mexican border city of Tijuana, just south of San Diego on the U.S. side, the move to a former outdoor concert venue after torrential rains a day earlier reduced the old shelter to a muddy, smelly mess was a welcome relief.

“Here it’s better,” said Victor Manuel Argeta.

The 44-year-old native of Usulutan, El Salvador, spoke alongside his wife and two children as he surveyed the limited indoor space while many other caravan migrants set up simple camps in an open square in the middle of the property.

“It’s dry. We have a dry blanket. They gave us mattresses, too,” said Argeta.

He said he joined the caravan to find better job prospects in the United States.

Many of the migrants who made the trek to the East Tijuana property, some 7 miles (11 km) from the border, appeared thankful to be out of the muck even if most will sleep on thin mattresses on a cold, hard floor.

Jorge Alberto Lobo, 21, also from El Salvador, was eager to leave the old shelter as he packed up his few belongings.

“I have the dream, I think we all had it, to get to the other side, to the United States,” he said, but quickly adding that if he does not make it he will likely stay put in Mexico and look for work.


On Saturday, Mexico’s leftist president-elect, Andres Manuel Lopez Obrador, will take the oath of office in the capital as he seeks to make good on campaign promises to alienate poverty and inequality, in part to help stem the flow of Mexico’s own migrants.

The former mayor of Mexico City has welcomed the caravan migrants in speeches, pledging to offer work visas and even jobs building a major train line he has proposed.

The day before his inauguration, Lopez Obrador was resting with friends at this ranch in southern Chiapas state, near the border with Guatemala, and reaffirmed his support for the migrants.

“Progressive, democratic governments respect migrants, respect the right all of us have as human beings to search out a better life. It’s the most important human right,” he said in a video posted on Twitter.

He made a point of reflecting on the history of migrants north of the border.

“The United States is a country that became a powerhouse because of the work, effort and intelligence of migrants,” he said.

Trump, conversely, has dubbed the migrants an invading force that must be stopped, even threatening to shut the U.S. border if Mexico does not deport those gathered in Tijuana.

To date, Mexican officials have ignored the threat.

Reporting by Christine Murray; Editing by David Alire Garcia, Robert Birsel