What U.S. Tariff Suspension Means to Mexico's Economy



how much of a bullet did they dodge by not having these imports how bad would it have been for Mexico well I think as you know it was pretty was probably nonlinear from 5% to 10% I would say it is just managed to ball pressures on inflation and thousand risk on growth and probably expecting lower world by putting two point three percentage points but higher than that probably it would be just hint of our confirmation of recession in Mexico and obviously kind of struggle for the Mexican central bank because inflationary pressures on and that and risk on inflation would be much more higher so for the time being at least the tariffs are suspended although president Trump has said you know they could come back this just this morning he said there's more parts to the deal we haven't seen yet and if it's not ratified by the Mexican a parliament that in fact there the Mexican legislators and in fact we'd be back with the tariffs once again at the same time it's not just about trade and tariffs Mexico its own struggles we'll put up a chart here actually it shows the US dollar against the Mexican peso over time and the yellow vertical line here is when President Lopez Obrador was elected right but then we also have Fitch warning about possible downgrades the end and actually downgrade over the orange they actually downgraded before the terrorists were announced yeah that's right many things happening in Mexico as you just mentioned many story happening at the same time and correlated with each other we have Pemex we have to get in rating we have tight space for fiscal maneuvering we have a very ambitious target of a primary surplus for this year 1% and on top of that you have USMC a just waiting for to be ratifying the US Congress so many stories happen at the same time and obviously all of these have to be digested by our own local central bank that is facing currently upside pressures on inflation bounce up pressures on growth and there is all of these factors that could affect markets and and obviously what we already know is that Mikiko is is gives good good importance or significant importance to market developments as they could alter the Mexican peso




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