On Tuesday, November 8, Mexico will need to be completely and utterly prepared for the possibility of Donald Trump’s presidency. Agustin Carstens, the Central Bank governor of Mexico, stated that Trump’s election will be a “hurricane” for Mexico due to the negative effects he has had and will have on Mexico’s economy. This contingency plan has been an option since Trump’s first mention of forcing Mexico to pay for a wall to be built on the border, and the idea was only bolstered when he continued to claim that Mexican immigrants are criminals and rapists.
Trump has so far claimed to force Mexico to pay for an American border wall, has threatened to put a 35% tariff on American goods made in Mexico and sold in America, and has stated that he will tear up the NAFTA agreement of free trade between Canada, US, and Mexico if it isn’t renegotiated. Thus far in the election process, Trump’s influence on Mexico has been nothing but destructive as their economy and reputation among Americans has declined significantly since his rise in popularity and votes. The Peso has dropped in value by 11%, and it is continuing to drop with the impending possibility of Trump’s victory.
Trump’s election will have a direct effect on Mexico’s Peso, causing it to lose significant value and also causing a loss in over 6 million US jobs, not to mention the jobs that will be lost across the border. To be clear, Trump is not the only thing negatively affecting the economy. Mexico has been in political turmoil for quite some time now, especially with their president, Enrique Pena Nieto, and his record-low approval ratings, as well as many protests concerning education reforms, health policies, and living prices. However, he is definitely hurrying along their economic collapse, which will indirectly affect America’s economy due to a number of companies we have working in Mexico, the amount of American jobs supplied by Mexico, and the inner-workings of both the American dollar and the Peso.
Facing these prospects, Mexico is planning a serious contingency plan to attempt to protect themselves from Trump’s political plans, although they have not released what these plans entail. Carstens states, “If the adverse situation materializes, it’s foreseeable that the Mexican authorities respond in some way. It’s a contingency plan that we’re discussing with the finance ministry, we hope we don’t have to use it.”
