President Donald Trump’s tariff threats against Mexico are harming the Americas, Miguel Basanez, former Mexican ambassador to the U.S., told CNBC on Wednesday.
They are also bolstering another U.S. trade foe, he added.
The 5% duties on all Mexican imports are set to take effect Monday and are expected to gradually rise to 25% by October.
“What he is doing, he is weakening the economic zone of the Americas and he’s weakening the economic area of Europe, ” Basanez said in an interview with “The Exchange. ” “Then what he’s doing is strengthening China. ”
The U.S. and China have been engaged in an escalating trade war, with each country upping tariffs on the other.
But Trump’s latest target is Mexico. In a surprise move last week, the president said he was imposing the tariffs to stop immigrants from coming through Mexico and crossing illegally into the U.S. The announcement came just as the approval process for the new trade agreement between the U.S., Mexico and Canada started to get underway.
However, White House trade advisor Peter Navarro said earlier Wednesday on CNN that the tariffs “may not have to go into effect,” depending on the outcomes of talks scheduled between a Mexican delegation and Vice President Mike Pence Wednesday afternoon.
“We believe that these tariffs may not have to go into effect precisely because we have the Mexicans’ attention,” Navarro said.
Republican senators have also signaled they oppose the duties.
Basanez said the impact of the potential tariffs are already being felt in the Mexican currency, the peso. It plunged against the U.S. dollar after the tariff announcement, erasing all of its 2019 gains, but has since pared some of those losses.
“That’s the reason why the delegation of Mexicans is up there rather than just ignoring” Trump’s threats, he said.
However, there could also be another result from the latest trade tiff.
“What President Trump is doing is pushing Mexico to start talking to China,” Basanez said. “If he really goes on with his threat, Mexico will have not much options.”
The president who is in Ireland, said Wednesday that he thinks Mexico wants to make a trade deal, but if it does not stop the control of migrants, the levies will go into effect.
“Mexico can stop it. They have to stop it, otherwise we just won’t be able to do business. It’s a very simple thing. And I think they will stop it. I think they want to do something. I think they want to make a deal, and they sent their top people to try and do it,” Trump said.
However, seven former U.S. ambassadors to Mexico warned in a CNBC op-ed Wednesday that the tariffs could not only damage the economies of the U.S. and Mexico, but may make the migrant issue even worse. “Damaging Mexico’s economy will cripple its capacity to tackle migrant flows as well as the economic growth that contributed to ‘net zero’ Mexican migration to the U.S. today,” they wrote.
The White House did not immediately respond to a request for comment on Basanez’s remarks.