Trade Negotiations with China Uncertain as Administration Turns to Mexico

Trade talks between the world’s two largest economies are once again in limbo as President Donald Trump and his administration have turned their attention toward Mexico, raising the chances that a resolution to the months-long trade war rests on a meeting between Trump and his Chinese counterpart.

The latest stalemate with Beijing is a result of President Trump’s recent move to impose tariffs on Mexican imports as the country appears to do very little to halt undocumented immigrants from crossing the border to seek asylum. Trump said last week that if Mexico fails to take any concrete action to stop illegal border crossings, he would hit the country with a 5 percent tariff on imports, a strategy often employed by the current administration.

However, the move calls into question the future of the revised U.S.-Mexico-Canada agreement and its ratification.

Executives of the most influential American businesses also believe the move could send the wrong message to China, which has been locked in trade negotiations with the United States for months with little progress on sticking issues.

“What happens in Mexico doesn’t happen without the rest of the world seeing it,” said the executive vice president and chief policy officer at the U.S. Chamber of Commerce, Neil Bradley. “At some point that begins to weaken your ability to negotiate deals around the world.”

Complicating the situation further is the collapse of trade talks between Washington and Beijing last month, causing an indefinite suspension of negotiations. The Trump administration decided at the time to slap additional tariffs on $200 billion of Chinese goods and the Asian nation responded with its own retaliatory measures.

President Trump has not indicated he is willing to yield, threatening to impose more tariffs that “could go up very, very substantially, very easily.”

“I think they probably wish they made the deal that they had on the table before they tried to renegotiate,” he said last week, during a joint press conference with Japanese Prime Minister Shinzo Abe in Tokyo. “They would like to make a deal. We’re not ready to make a deal.”

China later responded by accusing the U.S. of committing “economic terrorism.” As a result, the government announced it would blacklist a number of American companies, individuals and organizations, a move reminiscent of the U.S.’ ban on Huawei’s products.