Mexico is growing more optimistic about a Donald Trump presidency, primarily because items he promised as a candidate have not yet come to fruition — namely, revising or cancelling the North American Free Trade Agreement (NAFTA) and building a wall on the U.S. southern border, in addition to executive order setbacks to deport illegal immigrants, according to The Economist.
While judges block Trump’s executive orders on immigration, Mexican officials see a reprieve as initiatives stall in his administration. Also, new U.S. Commerce Secretary Wilbur Ross is thought to be considering the formation of a “very sensible” agreement with Mexico that proposes a deal more like the Trans-Pacific Partnership (TPP), where the U.S. and Mexico could forge bonds to create a “mutually beneficial regional powerhouse,” according to leaked documents.
As a result, the peso has nearly sprung back to levels before the U.S. 2016 presidential election, thereby reducing the risk of higher inflation and interest rates. In addition, JPMorgan Chase recently upped its growth forecast for Mexico from 1.3 percent to 2 percent.
Still of concern to the Mexican government are issues including what the U.S. could do regarding changes to its tax law. A proposal to initiate a “border-adjustment tax” could hurt countries that export goods to the U.S. And, consumer spending is down in Mexico due to higher inflation.
The unease of what the future holds for Mexico could serve as a catalyst for what the country should be doing anyway regarding its problems, such as spreading prosperity, raising productivity and strengthening the rule of law, the article explained, noting that Mexico’s poor infrastructure and criminality were detriments to growth.
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