Thomas Gallatin / January 27, 2017

Mexico Is Not the Enemy

Trump’s trade rhetoric is creating unneeded tension with Mexico.

Starting a trade war with Mexico will benefit neither the U.S. nor Mexico. Donald Trump’s populist rhetoric of blaming Mexico for the loss of U.S. jobs may play well with his fans in the American public, but it unfortunately oversimplifies an important, complex and beneficial economic relationship that exists between the two nations. Free market economics is not a zero-sum game, and Trump should know that as well as than anyone.

Trump’s protectionist instincts may work in the business realm when seeking to beat out the competition, but international relations are about much more than securing the bottom line. It’s true that the U.S.‘s trade deficit with Mexico is quite significant, approaching $60 billion this past year, but the true benefits of NAFTA are more than mere economics. Besides, all a trade deficit really means is that Americans bought a lot of goods and services they want.

Trump is right to aggressively combat the massive problem of illegal immigration and his recent executive orders on securing the border are a much needed breath of fresh air. However, it would be unwise to abandon the carrot that is NAFTA. That free trade agreement has successfully helped turn Mexico’s economy around, resulting in more jobs created and a rising standard of living for an increasing number of Mexicans. It has helped to establish Mexico as the U.S.’s second largest export market, translating into six million American jobs that depend on this trade. It has helped to curb the socialism that tends to feature so prominently in many South American countries.

While Trump is right to fault Mexico for allowing and even benefiting from illegal immigration, turning Mexico into an enemy of the U.S. will not benefit the American worker, nor will it help in the fight against illegal immigration. A strong Mexican economy and free trade agreements between our two nations will reap long-term benefits that significantly outweigh any negatives. Just imagine how much illegal immigration would be stemmed if Mexico’s standard of living matched that of Canada.

Trump’s call to deregulation and a lowering of the corporate tax rate will go a lot farther in boosting the U.S. economy and creating more American jobs than will raising tariffs on Mexico.

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