As of November, Mexico was the second most popular destination for American exports — $212 billion up to that point in 2016, and within striking distance of number-one Canada.
That is a very large number — nearly one-sixth of all U.S. exports — and behind that number is a similarly large number of American jobs. It’s a number to keep an eye on as President Trump talks about renegotiating NAFTA and risking retaliation by Mexico:
Mexico’s Economy Secretary said Tuesday his country could leave the North American Free Trade Agreement if talks on re-negotiating it are unsatisfactory.
Ildefonso Guajardo told the Televisa network that his country will be in a weak position at talks with U.S. President Donald Trump unless Mexico makes it clear it won’t accept just anything in order to preserve the three-nation trade pact.
Guajardo said “it would be impossible to sell something here at home unless it has clear benefits for Mexico.”
“If we are going to go for something that is less than what we have, it makes no sense to stay,” Guajardo said.
Trump’s argument is that Mexico obviously wants and depends on access to American markets as well. Mexican goods account for 13.5 percent of all U.S. imports, but the U.S. is the destination of the vast majority of Mexican exports — nearly 75 percent in some recent years. Trump views this as leverage.
But between export-related American jobs and the American retail jobs that are possible because of open trade with Mexico, Trump will be holding a not-insignifiant part of his own economy hostage when he initiates talks to renegotiate the trade pact.
His trade stance was undeniably a large part of his appeal to the working-class voter. In a sense, he has to follow through on what he promised. But what he’s doing here will come with trade-offs, and both countries could be poorer for the result. And that’s without even mentioning the American consumer, who will face higher prices as a trade-off for whatever “improvements” Trump manages to make to the “deal.”
