Mexico dodged tariffs but still could face major costs under new U.S. deal

Mexican President Andres Manuel Lopez Obrador declared at a rally here Saturday that his country had averted a potential economic crisis by reaching an agreement with the Trump administration to head off tariffs on Mexican imports.

“On Monday there will not be tariffs. ... There will not be a financial crisis in our country,” Lopez Obrador told a cheering crowd, as he stressed the close historic and social ties between the two nations. “The United States and Mexico are not distant neighbors.”

The evening rally had been scheduled prior to the cancellation of Trump’s threat to implement tariffs for Mexican imports starting Monday if Mexico did not act to stem the tide of migrants into the U.S. In exchange, Mexico said it would receive an indeterminate number of asylum seekers, mostly Central Americans, as they await adjudication of their cases in the United States, a process that can drag on for months. Mexico also agreed to deploy some 6,000 National Guard troops to help deter illicit migration along its southern border with Guatemala.

Mexico has long been a corridor for U.S.-bound migrants from Central America, but the numbers have spiked in recent months to levels not seen in a decade or more, drawing condemnation from Trump and sparking the tariff threat against Mexico.

But the accord, if carried out, came with a social and economic price tag — Mexico agreed to receive what could potentially be tens of thousands of U.S. asylum-seekers in coming months and provide them with “jobs, healthcare and education,” according to a joint statement outlining the arrangement. The increasing presence of impoverished Central American migrants in recent months has already raised tensions in various northern border cities, including Tijuana, where an influx of Central American migrants last year sparked nativist protests.

In previous comments, Lopez Obrador has repeatedly stressed the human rights of migrants, but now his government appears to be accepting an accord that seeks to limit asylum seekers’ ability to access U.S. territory.

Ironically, then-candidate Lopez Obrador traveled to Tijuana last year and assailed the Mexican government for doing the “dirty work” of the U.S. in detaining and deporting Central Americans. Now, however, Lopez Obrador is hailing a deal that targets migrants as a win for Mexico.

Others here called it an example of the Mexican government bending too much to U.S. pressure.

“There is nothing to celebrate,” Soledad Loaeza, a professor at Colegio de Mexico, wrote on Twitter. “Trump put us on our knees like no other president of the [U.S.] had ever done. These are sad days for Mexicans.”

In fact, the accord could be short-lived.

According to a State Department summary, Mexico and the United States may review the agreement in 90 days “in the event the measures do not have the expected results.”

That raises the possibility that Trump will again threaten tariffs as the contentious U.S. election campaign advances and Trump again turns to what is viewed here as Mexico-bashing.

“Facing a threat, the [Mexican] government eliminated the tariff threat but assumed an immense responsibility, maybe an impossible one,” wrote Mexican historian Enrique Krauze on Twitter. “Let’s get ready to reject the next threat, which without doubt will come.”

Officials here and in other border cities that have already received more than 10,000 asylum seekers returned to Mexico as part of a controversial Trump administration initiative — widely known as Remain in Mexico — have repeatedly asked federal authorities for more help. Under the program, migrants who seek asylum along the U.S. border are returned to Mexico as their cases are adjudicated, a process that can drag on for months or even years.

“People feel under strain, and I worry a lot about what is going to happen to social and political cohesion,” said Duncan Wood, director of the Mexico Institute at the Wilson Center, a Washington-based think tank.

Wood acknowledged that for Mexico, agreeing to accept more migrants was far better than suffering a 5% tax on all of its exports to the U.S., which Trump had threatened unless Mexico did more to deter Central American migrants from crossing its territory.

“Tariffs would have been catastrophic,” said Wood. “Mexico chose the lesser of two evils.”

Business leaders in Mexico celebrated the agreement as crucial for a nation plagued with slow growth and heavily dependent on exports to the north. But they also cautioned that Washington could renew the prospect of tariffs, a possibility that has already caused uncertainty among investors.

“We should celebrate that this threat, this grave threat has been, for the moment, postponed,” Gustavo de Hoyos, president of the Coparmex business group, told the Milenio news outlet. “We can only hope that it will be eliminated in a definitive fashion.”

Mexican officials spent the last several days negotiating ways to avoid the tariffs in meetings with U.S. Secretary of State Michael R. Pompeo and other officials in Washington before announcing an accord Friday night.

Under the terms, Mexico also said it would deploy some 6,000 members of its new National Guard close to the country’s southern border with Guatemala, the principal entry point for U.S.-bound migrants, mostly nationals of Honduras and Guatemala.

Some in Mexico questioned the wisdom of a deployment, given that the Guard was created by Lopez Obrador to tackle historic levels of crime in the country. And human rights activists in Mexico have long decried the prospect of a U.S.-style militarization of the mostly unguarded 600-mile frontier with Guatemala, long a haven for migrant smugglers and the movement of contraband.

Military police have been present along that border for many weeks to help maintain checkpoints and control the northbound movement of migrants. That is part of a broader Mexican crackdown in response to pressure from Washington that has included expanded arrests and deportations of migrants seeking to reach U.S. territory.

While unclear in its details, the agreement appears to raise the possibility that the return to Mexico process — currently in place in Tijuana, Mexicali and Ciudad Juarez — would be expanded to Reynosa and Matamoros. In those and other Mexican border towns, cartels have long preyed on Central American migrants, kidnapping them, extorting them and recruiting them by force into criminal activity.

Remain in Mexico has faced several legal challenges by civil liberties groups who call it illegal, but the U.S. 9th Circuit Court of Appeals has allowed the returns to continue while the case is pending.

The U.S., for its part, said Friday it would immediately be expanding the program “across its entire southern border.” It also committed “to accelerate the adjudication of asylum claims and to conclude removal proceedings as expeditiously as possible.”

McDonnell reported from Tijuana and Linthicum from Mexico City. Cecilia Sanchez of The Times’ Mexico City bureau contributed to this report.