Mexican Media Jeers, Peso Drops On Trump Presidency
It’s arguable, but suffice it to say all of Mexico woke up this morning feeling a Great Wall is about to get erected between two countries who share strong cultural, political and economic ties. And that all of their family and friends from California to Massachusetts are just a few months away from being deported. While the likelihood of that is about as slim as Hillary supporters hightailing it to Canada, there was a somber mood in the op-ed pages of the Wednesday morning La Jornada.
In an op-ed titled “Dark Times”, the paper said that the Republican House and Senate, coupled with a “belligerent, intolerant authoritarian” in the White is bad news for Mexico and for Mexicans. La Jornada’seditorial even when on to compare the arrival of president elect Donald Trump to that of George W. Bush after two years of Bill Clinton, pointing out dubious and human rights abuses. (For the record, Trump is no fan of regime changer George W. Bush. The Bush’s did not pull the trigger for Trump on Tuesday.)
Another aspect of this election that can be felt today is the financial instability in the markets and may persist at least until there is a new president in the White House in January. This intermediate period can cause a sizable decline in a number of economies. In ours, for example, the peso has suffered its biggest losses today than it has all year.”
Mexico’s stock market and peso are down 8.5% and 7% respectively, the worst performer within the big emerging markets.
Mexico has nothing to gain from this election. If Trump threatens to persecute and deport undocumented immigrants living in the U.S. and build a wall from the Gulf of Mexico to California, Hillary Clinton is a consummate representative of imperial arrogance. She can effectively execute on the powers and wishes of transnational corporations that have caused social, institutional , environmental and economic devastation in Mexico over years of neo-liberal rule.”
Nevertheless, Mexico’s president Enrique Peña Neto was the first in the Americas to congratulate Donald Trump directly via Twitter. Saying, ”I congratulate the United States on their election and and reiterate to Donald Trump our willingness to work together in favor of bilateral relations.” He later when on to say, “Mexico and the United States are friends, partners and allies and should continue to collaborate for the competitiveness and development of North America.”
His Tweet was then met with the usual social media snark, including the picture of a person looking someone’s black leather boots.
Neto was chastised for inviting Trump to Mexico in August. Shortly after, Trump said Mexico would pay for the wall. The Mexican government said it would not pay for any wall.
From a very real business perspective, life in Mexico is on hold. Companies will wait to see what happens with NAFTA and how the Trump administration will play with tariffs next year. The lack of clarity on tariffs has been one of the biggest problems in the markets with a Trump presidency, as he is seen as being less laisezz faire than Hillary.
The banner headline of Mexico’s El Economista newspaper today read, simply: “Nightmare.”
Forex markets quickly reversed gains from this morning trading sessions. Overshooting is not only expected to continue in the next few days in the peso, but also in the speculative world of politics and what Trump will and will not do. For immigrants, a Trump White House and a Republican congress means there will be no amnesty deal for immigrants who have overstayed their visas. Overstaying visa is visa fraud.
Media and politics aside, Nomura Securities expects initial fallout in the peso to “unchartered territory”. A survey of Nomura clients pegged the peso between 22 and 26 within the next 12 months.
The first 100 days of Trump’s presidency will be crucial in terms of gauging what type of policy could be implemented.
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