Time is running out before Washington is set to impose new levies of 5% on all Mexican goods entering the US, and with talks set to resume on Thursday, both sides are on tenterhooks.
Trump, who is in Europe on Thursday commemorating the lives lost during D-Day, said that "not nearly enough" progress has been made during talks between Marcelo Ebrada and a top US trade official. In fact, it's unclear how much progress can be made on any deal before Trump returns from his trip abroad.
Immigration discussions at the White House with representatives of Mexico have ended for the day. Progress is being made, but not nearly enough! Border arrests for May are at 133,000 because of Mexico & the Democrats in Congress refusing to budge on immigration reform. Further...— Donald J. Trump (@realDonaldTrump) June 5, 2019
....talks with Mexico will resume tomorrow with the understanding that, if no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule. The higher the Tariffs go, the higher the number of companies that will move back to the USA!— Donald J. Trump (@realDonaldTrump) June 5, 2019
The peso weakened further as Moody’s Investors Service on Wednesday cut Mexico’s outlook to negative from stable, and then Fitch lowered the nation’s sovereign rating to BBB from BBB+.
Still, Ebrard, said he was confident the two sides could reach a deal before the June 10 tariff deadline. Ebrard said he had a productive meeting with other US officials, including Mike Pompeo and Mike.
"We are optimistic because we had a good meeting with respectful positions from both parts," Ebrard said during a press conference at the Mexican Embassy in Washington. "We had an opportunity to explain our point of view."
Ultimately, Trump has said he also believes Mexico wants to make a deal, but what they have proposed so far hasn't been sufficient.
The biggest assurance that the US is seeking, according to Peter Navarro, a White House advisor on trade, is an assurance that Mexico will hold asylum seekers on its side of the border while they await heir asylum hearings. This 'remain in Mexico.'
The most important thing is for Mexico to take the asylum seekers. The number of apprehensions and people denied entry along the U.S.-Mexico border has been rising steadily. More than 144,000 people were apprehended after illegally crossing the southern border in May - the most in a single month this year.
There's another risk to the new trade war with Mexico: It risks upending the 'Nafta 2.0' free trade agreement that was one of the administration's biggest plicy victories.
Mexican President Andres Manuel Lopez Obrador has maintained a consistently conciliatory tone, refusing to speculate about what Mexico might do to respond to the tariffs if Trump follows through next week - something Trump described as a virtual certainty during a press conference with Theresa May.