U.S. President Donald Trump defended his administration’s deal with Mexico against criticism that there were no major new commitments to stem a flow of Central American migrants crossing into the United States.
We are waiting for further clarification as to what deal Trump has struck with Mexico, given a late announcement came on Friday where Trump Tweeted,
“… the tariffs scheduled to be implemented by the U.S. on Monday against Mexico are hereby indefinitely suspended – Mexico has agreed to take strong measures to stem the tide of Migration through Mexico … details of the agreement will be released shortly by the State Department”…
Fiday’s joint communique broadly sketched the terms of the agreement but it contained few details. Details of the deal, which has averted Trump’s threatened imposition of 5% import tariffs on all Mexican goods that had been due to start on Monday, will et markets know whether Mexico has pledged to buy more U.S. agricultural products and if the deal materially expanded a previous commitment by Mexico to more vigorously police its southern border with Guatemala.
On Saturday, Trump said that Mexico had agreed to “immediately begin” buying “large quantities” of agricultural goods from U.S. farmers. However, on CBS on today, the Mexican ambassador to the United States, Martha Bárcena Coqui, said only that trade would increase without the tariffs. Mexico’s minister of foreign affairs Marcelo Ebrard tweeted that the deal should boost economic growth and therefore demand for U.S. agricultural products.
Risk on
At the open in Asia today, we have seen the USD/MXN is -1.77%, down to a May resistance area. USD/JPY has gapped 0.39% and AUD/JPY by 0.35%. Note, Australian markets are closed, which may mean thinner liquidity in the Aussie and early Asia in general.
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