The US is giving up tariffs for Mexico, but not ultimately

Donald Trump said he has made an agreement with Mexico to curb illegal emigration and hopes for positive changes. Therefore, it suspends the introduction of customs duties on goods from this country, which in the amount of 5 percent. were to apply from Monday. For how long? It is not known, but the Reuters agency already reports that nothing has changed at Mexico's borders - they have in no way strengthened the military and police forces that are supposed to prevent entry into the "Promised land". Therefore, there are many indications that the conflict may return over time - and with doubled strength.

The decision - as usual via Twitter - was announced by Donald Trump on Saturday. However, it is not based on facts yet, but on hope. The Mexicans simply got another chance from the US President.

"Mexico will do its best, and if it does, it will be a very successful agreement between the United States and Mexico." - wrote Donald Trump.

He also urges Mexicans to start buying crops from American farmers. The agricultural sector is one of the most important for Donald Trump, and recently it has been losing heavily due to the trade war with China. The Mexican market could even partially patch this hole.

Details of the US and Mexico agreements

The agreement explicitly states that Mexico must send more troops to the southern border through which immigrants illegally pass. What's more - some of them have to be included in the asylum program so that Mexico is their destination country.

For now, however, no changes are in sight. The Reuters agency informs that on the border between Mexico and Guatemala (emigrants are often residents of this and other Central American countries) there are no more troops or other services. Meanwhile, the National Guard was supposed to strengthen the border "immediately after the end of the talks."

The agreement also assumes that Mexico will increase its involvement in the fight against gangs involved in smuggling people into the US. There is really a lot to do in this area, if only because the rich groups that have built up the financial power on drug trafficking deal with it, and the Mexican border with Guatemala is 962 km long, which allows gangs to quietly operate.

Moreover, Mexicans don't seem too humble in their comments. This was expressed by the President of Mexico Lopez Obrador himself, who during his speech in the city of Tijunana, near the US border, emphasized that if the Americans impose tariffs on Mexican goods, he would immediately impose tariffs on goods imported from the USA. Mexicans add that it is also important for them that they left the confusion with "intact dignity". Do they value it higher than the economy? Time will tell. The declaration stated that the agreement would be assessed by both parties after 90 days.

What does USA play about?

Recall: after opening the front on the trade war with China, President Donald Trump began to threaten the introduction of tariffs on products from other countries. First he suggested that they could be Germany, but this topic is not going on yet, focusing on Mexico. The nearest neighbor of the US was to be covered by the 5-percent duty rate on goods worth over 350 billion dollars

US Ambassador to the United Martha Barcena emphasizes that the agreement was concluded after the next round of talks that lasted 12 hours. The effect is not only to limit illegal emigration, but also to help people who want to get out of poverty.

“Mexico will take steps to consistently enforce migration laws. Asylum seekers in the US who are in Mexico at the time of the application will have employment, education and healthcare opportunities. " - informs Martha Barcena.

What does this mean for the US? Many experts emphasize that the main point is to show who is the strongest in the world. There are more and more talks about the influence of Russian as well as developing China. The US wants to show that it is still not only "First gendarme" in the world, but also a country that has a huge economic advantage and will not hesitate to use financial pressure to achieve its long-term goals, which of course is US prosperity - even if it were to increase at the expense of other countries.

Stock exchanges reacted positively to this information - both European and US indices opened above Friday's close.

S&P 500 index chart, M15 interval. Source: XTB xStation