Following reports that US immigration officials had launched countrywide raids and arrested hundreds of illegal aliens across the nation as a result of Donald Trump's recent immigration executive order, this morning the President weighed in on Twitter, stating that "the crackdown on illegal criminals is merely the keeping of my campaign promise. Gang members, drug dealers & others are being removed!"
Last week brought fresh deterioration in diplomatic relations between the US and Mexico after Trump threatened to cancel a White House meeting with Mexican President Pena Nieto, saying if “Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting”. And while Pena Nieto tried to save face by officially cancelling the meeting over twitter, Mexicans are growing increasingly frustrated with a candidate that they see as too soft in combatting an aggressive Trump Presidency.
While the biggest threat facing Mexico, and its unpopular president Enrique Pena Nieto, in the past month has been President Trump's insistence on building a "Massive Wall", which Mexico would pay for, as well as Trump's threats of renegotiating NAFTA, today we got a fresh reminder that America's neighbor to the south has another looming problem: a rapidly deteriorating economy coupled with surging inflation on the back of the recent 20% price hike for gasoline, which culminated in a record crash in Mexican consumer confidence.
The Mexican government denies a report by the Associated Press that alleges US President Donald Trump threatened President Enrique Pena Nieto with US military action to deal with the “bad hombres down there,” if Mexico was not willing to. Referring to drug trafficking across the border, Trump allegedly told Pena Nieto “You aren’t doing enough to stop them. I think your military is scared.
When it comes to the future of the US economy, capital markets, the strength of the dollar, and tax policy in general, few proposals are likely to have as much of an impact as the border adjustment tax, or BAT, which as we profiled before, could have a significant impact on the value of the dollar, pushing it as much as 15% higher, and leading to dramatic changes in global trade patterns. As a reminder, House speaker Paul Ryan is the primary advocate of the BAT, arguing this effective $1.2 trillion tax on imports is the only way Congress can pay for Trump's proposed massive tax cuts.