US-Mexico talks on migration and trade to resume in Washington

Talks are aimed at striking a deal to avert 5 percent tariffs on Mexican goods set to take effect Monday.

    If tariffs go into force on Monday, the US will find itself in serious trade disputes with both China and Mexico [Al Drago/Reuters]
    If tariffs go into force on Monday, the US will find itself in serious trade disputes with both China and Mexico [Al Drago/Reuters]

    Officials from Mexico and the United States are set to resume talks in Washington on Thursday afternoon, holding meetings that are aimed at heading off punitive tariffs on Mexican goods, after US President Donald Trump said more needed to be done to curb migration at the southern US border.

    The two sides met on Wednesday for discussions chaired by Vice President Mike Pence in an effort to strike a deal that would satisfy Trump, who has threatened to impose five percent tariffs on Mexican goods starting Monday, and increase them in the coming months to 25 percent if a deal can't be reached.

    "Progress is being made, but not nearly enough!" Trump tweeted late on Wednesday while traveling in Europe to mark the 75th anniversary of World War II's D-Day.

    Pence told reporters the US State Department would coordinate talks on Thursday, but gave no further details.

    Mexican officials, meanwhile, appear to have ramped up efforts to halt the flow of Central American migrants crossing the border to the US, with Mexican soldiers, armed police and migration officials blocking migrants along its own southern border with Guatemala.

    It was unclear whether the hardening of Mexico's response would appease Trump, who is struggling to make good on his key 2016 presidential campaign promise to build a wall along the US-Mexico border as part of a hard-line immigration stance.

    Escalation of trade dispute

    With efforts to get Mexico and then the US Congress to fund the barrier having failed, Trump threatened to shut down the border completely, before backing off and turning to punitive tariffs.

    The prospect of US tariffs on Mexican goods has rattled global financial markets. Even Trump's fellow Republicans have been fretting about the potential economic impact on US businesses and consumers who would have to absorb the costs.

    Mexico would also take an economic hit that analysts have said could spark a recession. Fitch Ratings downgraded Mexico's sovereign debt rating on Wednesday, citing trade tensions among other risks, while Moody's Investors Service lowered its outlook to negative.

    Even with more talks on Thursday, it was unclear whether a resolution was on the horizon, with Trump overseas through Friday.

    It was also unclear if Secretary of State Mike Pompeo, who attended Wednesday's discussions with Mexican Foreign Minister Marcelo Ebrard, would lead Thursday's talks.

    Ebrard said Wednesday's discussions had focused on migration rather than tariffs, and that more discussions were needed on Thursday to find common ground.

    The Trump administration is already locked in a tit-for-tat trade dispute with China. If tariffs are implemented on Mexican goods, it will open up a new front in US trade wars with another top trading partner. 

    Mexican President Andres Manuel Lopez Obrador has said he is optimistic a deal will be reached. Meanwhile, Reuters news agency reported Wednesday that Mexican officials have prepared a list of US products that may face retaliatory tariffs.

    Those would target US products from agricultural and industrial states regarded as Trump's electoral base, a tactic Beijing has also used with an eye toward impacting his re-election bid in the 2020 US presidential election.

    SOURCE: Reuters news agency