One of the most toxic situations President Donald Trump has found himself, and the U.S. in is his relationship with Mexican leader President Enrique Nieto. Tensions between the two countries have been building for months, but that hostility may boil over soon.
Quite memorably, Trump has said that he will make Mexico pay for this, to which Nieto brilliantly responded, “I am not paying for that f—— wall.” This statement has led to many other awkward and passive aggressive encounters between the two leaders.
While these political issues are worrying, they do not compare to the potential disaster looming: the renegotiation of NAFTA.
While campaigning, Trump often said that NAFTA was, “the worst trade deal in history” and vowed that he would renegotiate the terms of the agreement once in office.
Given his previous comments toward Mexico and current crusade of deporting Mexican immigrants, the sheer idea of renegotiation has caused both sides to tighten up and radicalize their positions.
In press conferences, Nieto has said that if the U.S. disregards Mexico’s interests, he will leave NAFTA. As well, Trump has said that if Mexico will not work to improve American interests, the United States will back out.
Many Americans believe that leaving NAFTA would actually help the economy because companies are moving their businesses from North America in favor of Mexico where labor is cheaper and there are fewer regulations. This is a valid objection to the agreement, but I argue that the U.S. leaving NAFTA would actually be more detrimental to the U.S. economy because of our heavy reliance on trade with Mexico.
I am by no means an economist, but any fool who understands simple math can see how important NAFTA is to the U.S. economy. According to census.gov, Mexico and Canada are the two countries who import the most from the United States as Canada imports 18.5 percent of all American exports and Mexico imports 16 percent.
Combining those, if the U.S. were to leave NAFTA, we would lose buyers for 34.5 percent of our exports, which would be disastrous to the U.S. economy. So, while this is partially a discussion about where America gets its goods, where we send what we produce is also a necessary conversation, and leaving NAFTA would be crippling.
As for Mexico, the costs of leaving NAFTA would be even greater. According to the Washington Post, the U.S. is Mexico’s single greatest buyer, taking in nearly 80 percent of exports. This situation is perhaps even more drastic than that of the U.S. simply because of the reliance Mexico’s economy has on American business.
Perhaps this data is the result of American businesses going to Mexico and selling their products back into the U.S., but this itself shows a problem with leaving NAFTA; businesses cannot return to the U.S. immediately which will stall the American economy.
In conclusion, the possibility of either the United States or Mexico leaving NAFTA is a soap opera plot of two lovers who hate to love each other but need each other in the end. It just doesn’t make sense for either country to leave the agreement because they are so interconnected.
As a student of politics and one especially interested in foreign affairs, I have come to hardly even be surprised by the absurdities within our government lately, and the case of our relationship with Mexico as trade allies is no different. Personally, I’m kicked back with a bucket of popcorn ready for the entertainment and drama to inevitably boil up.
– Austin Falin