Tariffs and Deportation Will Weaken A Fragile Mexico

There is a saying that has been repeated many times by America’s neighbors across the Rio Grande: “Poor Mexico, so far from God and so close to the United States.”

Attributed to Mexican dictator Porfirio Diaz, this quote has become relevant once again with the Trump administration’s threats to deport 11 million undocumented immigrants and put a tariff as high as 20 percent on Mexican imports. The threat from these two actions alone would put great pressure on Mexico’s already unsteady economy and institutions to the detriment of both Mexican and U.S. interests. While much has been written about the impact these actions could have in the United States, there has been less commentary on what they mean for Mexico. And yet, just a few years ago during the Mexican drug war, many in the United States were fearful of a collapse of the Mexican state, the humanitarian disaster that would entail, the breakdown of trade, and the flood of refugees across the American border. Yet today these concerns seem to have been forgotten by America’s political leaders.

So far, Trump has publically backtracked and claims he will only deport between two and three million people. Although one cannot be sure what number of undocumented or even legal immigrants would be included in this deportation, several estimates have been made. Pew Research has estimated that about 52 percent of all undocumented immigrants originated from Mexico. On the low end, the United States could deport two to three million people, on a similar level of Obama’s record 2.5 million deportations. This would result in about 1 and 1.5 million people being forcibly repatriated to Mexico. In the middle range, the Trump administration could deport around 4 to 5 million people, forcing about 2 to 2.6 million people to return. Finally, if Trump fulfilled his original promise to deport all 11 million undocumented immigrants, 5.7 million people would be sent back.

What does this mean and why does it matter? Even with the current level of deportations Mexico still has net emigration of about 105,000 people leaving each year. Therefore, the return of undocumented immigrants on any level above the 2.5 million deported under Obama would be on a scale Mexican institutions and society have not experienced in recent memory. Given the vast corruption, the ongoing violent drug war, and the economy’s weakened state, one has to wonder the degree to which the Mexican state can handle accommodating all of its returned citizens, even excluding the threat of U.S. tariffs or a shutdown of remittances.

A few specific numbers are telling. Inflation of Mexico’s peso has shot up since Trump’s election, jumping from 3.31 percent in November to 4.72 percent in January. GDP growth has averaged a bare 0.5 percent over the last five years, and Mexico’s hopeful pre-U.S. election forecast of 1 percent has been cut to 0.6 percent. Additionally, the Fund for Peace’s 2016 Fragile States Index ranks Mexico overall as under “high warning.” This means Mexico has only a moderate ability to deal with displaced persons, its economic improvement remains moderate, and its ability to provide public services is rated as poor. The only plus side is that unemployment has gone down to 3.4 percent, though there is concern whether such improvement will hold.

The economies of Mexico and the United States are codependent. Mexican families receive about $25 billion in remittances from Mexican nationals or their descendants in the United States , upon which some 7 percent  of the adult population relies on to help make ends meet. Mexico also exports 81.1 percent  of its goods to the United States. Consequently, it is easy to see how tariffs or cutting remittances would be disastrous for Mexico; as for the United States, some 5 million jobs rely on trade with Mexico, including many in car manufacturing and agriculture- two industries that Trump has promised to revive and protect. What would happen if Mexico put up their own tariffs or boycotted US goods in response to adverse American policies?

Unforeseen demographic and economic shifts are transnational and hurt countries that share the same border-just look at the 1917 Mexican civil war that spilled over into the United States. Sudden mass migration, especially when forced, is disruptive to societies and can often overwhelm local or national resources and institutions. The collapse of trade is also disastrous, the most infamous example being the Smoot-Hawley Tariff that caused trade wars and contributed to the Great Depression.

These are lessons politicians in the United States have failed to recall. Even a great power can be significantly impacted by instability on its borders. It does not need an increased risk that a neighbor might collapse. America does not need to stir more anti-American sentiment right at its door for rival powers to exploit. Mass deportations and tariffs will cause these dangers to become reality. Mexico is fragile and needs support, not a push. The people and leaders south of the Rio Grande are friends and allies, and Washington would do well to remember that.

Image: Mexican flag. (Esparta Palma, Flickr, Creative Commons)


John Dale Grover is a graduate student in Conflict Analysis and Resolution at George Mason University and a current writer with Young Voices. Previously, he earned his BA in international relations at Bowdoin College and was a Non-Resident Fellow with the Center for the National Interest.

One comment

  • Nice article, hitting the immigration and NAFTA issues here at home from a different angle.

    Like

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