Mexico is increasingly confident that U.S. President Donald Trump will not be able to impose harsh barriers on imports anytime soon, and officials signaled they may hit their northern neighbor’s most trade-sensitive districts in case he does.
Trump wants to renegotiate the North American Free Trade Agreement with Mexico and Canada, but talks cannot begin until he triggers a 90-day notice period by informing Congress. Nominees for several important U.S. posts including trade representative and agriculture secretary have not yet been confirmed.
“As long as our counterparts in Washington don’t define their objectives … today NAFTA regulates trade, so we are not in a hurry to change anything,” Economy Minister Ildefonso Guajardo said at an event on Thursday.
The view of some Mexican officials and business leaders that the U.S. Congress, Supreme Court and some state governors are counterweights to Trump has also been reflected in markets, with the peso rallying in recent days to its strongest since Trump’s election in November.
“Time has in some way meant that the pumpkins have fallen in place in our favor,” Guajardo later told local radio, using an expression in Spanish.
In an interview with Reuters on Thursday, Trump said he supported some form of border tax to boost jobs. But such a tax would meet resistance in Congress from fiscally conservative Republicans and Democrats.
Moises Kalach, from the business group CCE and one of the lead private-sector NAFTA negotiators with the Mexican government, told Reuters that such hurdles could temper Trump’s plans.
“They balance it out so that this will be done with an institutional methodology, and not through social media,” he said. “At home, we’re ready, we’re ready for what’s coming.”
Foreign Minister Luis Videgaray said if the United States taxed Mexican imports, Mexico would “hit them where it hurts,” two Mexican newspapers reported, based on recordings they obtained of a closed meeting with lawmakers on Wednesday.
Videgaray warned of tariffs targeting congressional districts and states most reliant on exports to Mexico, giving as examples Iowa, Texas and Wisconsin.
Mexico’s Foreign Ministry did not respond to a request for comment about the reports.
Videgaray referred to a strategy Mexico used in 2009, slapping locally focused tariffs on 90 U.S. products in a dispute over trucks using U.S. roads. Mexico’s trucks were eventually allowed back and the tariffs lifted.
Comments by U.S. Treasury Secretary Steve Mnuchin to Fox Business Network that the NAFTA renegotiation could be win-win and would not change anything soon calmed nerves in Mexico on Thursday, where Videgaray met with U.S. Secretary of State Rex Tillerson and Homeland Security Secretary John Kelly.