Zero Day for Mexico



Tick tock, the clock moves forward marking the countdown without remorse. Saturday, February 1st, the date Donald Trump promised, on the day he assumed the U.S. presidency, he would apply 25% tariffs to all products from Mexico and Canada if they didn't immediately address his demands to end illegal migration and fentanyl trafficking to the U.S. The first threat was to apply these tariffs on day one of his administration; however, he reconsidered, perhaps waiting to have more information.

Unexpectedly, Colombia was the first country to test the fury of the new Trump administration after Gustavo Petro refused to receive illegal Colombian citizens from the U.S. Petro wanted to give deep symbolism to his action. However, Goliath responded with immediate tariff implementation and instant visa cancellations for entry to the U.S. Petro had to back down. He had to control his impulses and avoid greater damage. Trump had won the first pulse. Colombia would receive its citizens, and the U.S. would stop the tariffs. Will this be how things proceed from now on?

It seems the signal is the imposition of Trump's demands, or otherwise, the full fury of tariffs will fall upon those who refuse to submit. "Fire and fury" for whoever doesn't kneel. An almost epic drama... or a horror movie. Will Mexico and Canada walk the same path as Colombia? Will Justin Trudeau and Claudia Sheinbaum also have to submit to Trump's will? Perhaps things aren't as dramatic as they seem. Or are they? Trump's mandate is very clear, "America First." He repeated it defiantly in Davos. Is he a negotiator, or is he a bully? We're not talking about a "Harvard school" negotiation and William Ury's "win-win" here. We're talking about high stakes and high risks where you win or lose everything, and where the difference, as Chris Voss says, "is not divided."

Before Petro, it was Trudeau. A weak and limited president seeking reelection, against a president who cannot be reelected, who doesn't need to please anyone, and who has 4 years to achieve all he promised. Trudeau expected to negotiate Ury-style; Trump ran him over Voss-style, or perhaps Tyson-style, the pre-Jake Paul one, of course. Claudia Sheinbaum has been more cautious, seeking to maintain distance and discretion. She has maintained a firm but measured discourse of non-submission; however, her negotiators discretely and secretly seek agreements with little negotiating power. There are only two paths: intelligence or submission.

During President Enrique Peña's time, mistakes were made at the arrival of Trump's first term. However, there were also successes. Perhaps Peña shouldn't have invited Trump to Mexico. But finding Trump's friendly side was a resounding triumph. Luis Videgaray was in charge of establishing direct communication with the only man Trump listens to attentively, Jared Kushner, Ivanka Trump's husband. Videgaray had direct access to the White House thanks to Kushner, and Mexico emerged well from that first Trump administration. There were no mass deportations, no wall to pay for, and the free trade agreement remained. Today it's said that almost invisibly, Videgaray is once again in Washington, close to Kushner. Sun Tzu says: "The real victory is winning without fighting."

A head-on confrontation, like Petro's, would be a serious mistake. Due to proximity, mass deportation action would be so quick there would be no way to react in time. Remittances, one of the country's major sources of income, could be stopped in seconds. The automotive industry, another major source of income in Mexico, would be a sure target for Trump. But Trump isn't as impulsive a player as he seems. He listens, analyzes, and waits. He listened to his advisors and postponed the tariff application until February 1st. He analyzes how to apply tariffs in a way that doesn't harm himself and waits for Mexico and Canada to succumb to pressure. His real objective is different: to accelerate the USMCA renegotiation date scheduled for 2026.

It's complicated for Trump to universally apply a 25% tariff to all articles from Mexico and Canada. With economies intertwined for decades, the damage would be large and mutual. The tariff imposition would impact not only Mexico and Canada but also the U.S. significantly. Neither migration nor fentanyl are Trump's objectives, as they're just hooks to enrage his most fanatic followers. Trump's objective is to gradually tighten the rope. He can't postpone tariff application again as he would lose credibility and power. But he could start applying 10% tariffs perhaps, to certain specific products or industries, under a new threat of gradually increasing the percentage and applying it to more products and industries. Here, we must understand that threats aren't just threats; they cause serious damage - even if disaster doesn't occur, uncertainty causes much harm.

Trump has only 4 years. Waiting until 2026 to renegotiate the USMCA once more would leave Trump only two years of action, insufficient time to fulfill his campaign promises. The real objective is to bring Mexico and Canada to the negotiating table this year. Divide and conquer. In its time, Mexico added Canada to the free trade agreement with the U.S.; the objective was to add Canada as an ally to counteract U.S. power. Today we've already seen that Canada seems to have turned its back on Mexico. Trump wants to break a trilateral treaty and convert it into two bilateral treaties that would remove all power from the counterpart. Mexico must act, but stealthily and decisively. Find once again the proximity of those whom Trump does listen to and heed. Flexibility, adaptation, and agility are key. As Bruce Lee said: "Be like water." Or as was said in The Godfather: "Keep your friends close, and your enemies closer." Every minute we're closer to Zero Day.

Comments

Popular Posts