Donald Trump is still over 2 months from taking office, but he has already kept a major campaign promise. Both Canada and Mexico have agreed to renegotiate NAFTA. Liberals laughed at Trump’s promise to renegotiate because they claimed neither country would agree. But it won’t phase the liberals because they are quite accustomed to being wrong. The shock would come if they were ever right.
Mexico is having major economic problems and they can’t afford a trade war with the United States. They will agree to renegotiate NAFTA but will try to get something in return. They are deathly afraid that Trump intends to keep his promise to deport illegal aliens and place crippling tariffs on Mexican goods. The United States has been hurt badly, not only by massive trade deficits with Mexico but also with companies from each country and their investment in the other country. Mexican companies employ 68,800 employees in the US, while US companies employ 1,106,700 Mexicans. Personally, I would like to see NAFTA scrapped, making it possible for Trump to push for massive tariffs against American companies who took our jobs away and sent them to Mexico.
Mexico has huge risk in a trade war with President Donald Trump and the United States. About 90 percent of U.S.-based fortune 500 companies now have made substantial investments in Mexico. According to the U.S. Bureau of Economic Analysis’ report from 2012, U.S. multinational enterprises employed 1,106,700 people in Mexico, but Mexican companies only employ 68,800 in the United States.
America’s trading relationship with Mexico is not equal, but a number of U.S. companies and their workers do benefit from NAFTA. Mexico is America’s second-largest export market, with $236 billion, or 15.7 percent, of all U.S. exports in 2015. That is up 468 percent since NAFTA was signed in 1993.
But NAFTA has been so remarkably successful that Mexico, with $400 billion in exports, is now the 12th largest export economy in the world. That has only been possible because 80 percent of Mexico’s exports go to the United States.