The value of Mexico’s currency the peso has plunged lower in the wake of a series of tweets and statements by President Trump threatening to impose tariffs on Mexican products and renegotiate North American Free Trade Agreement.
CGTN’s Martin Markovits reports.
Value of peso falls after US President Trump's threatsThe value of Mexico's currency the peso has plunged lower in the wake of a series of tweets and statements by President Trump threatening to impose tariffs on Mexican products and renegotiate North American Free Trade Agreement. CGTN's Martin Markovits reports.
President Donald Trump’s vow to renegotiate the NAFTA has helped weaken the value of Mexico’s peso, creating uncertainty for the future of many Mexican businesses. And there are warnings a weak peso could lead to an increase in illegal migration to the United States.
Although President Trump’s executive order to extend the border wall has possibly generated the biggest headlines, his vow to renegotiate NAFTA and impose tariffs on Mexican productions could have a far greater impact on relations between the two countries.
According to the U.S. Chamber of Commerce, 6 million U.S. jobs depend on trade between the US and Mexico. If NAFTA is changed, those jobs could be at risk. And if new regulations favor the US manufacturing sector, many companies that depend on the low wages of Mexican labor would have to rethink their business strategies in order to survive.
Analysts are also warning of another possible consequence of a weakening peso that the dramatic rise in the cost of living it’s brought might actually push more of Mexico’s poorest residents to cross illegally into the U.S. This would reverse the current trend of more Mexicans returning to Mexico from the U.S. than leaving the country.