By Roberta Rampton and Dave Graham
WASHINGTON/MEXICO CITY (Reuters) - Mexican and U.S. officials resumed talks on trade and migration on Thursday, with markets rebounding on reports that a deal could be close, although it was unclear if Mexican pledges to curb migration flows were enough to stop tariffs on Mexican goods going ahead.
U.S. President Donald Trump has warned that tariffs of 5% on all Mexican exports to the United States will go into effect on Monday if Mexico does not step up efforts to stem an increase in mostly Central American migrants heading for the U.S. border.
Bilateral talks in Washington are seeking to avert the tariffs, which have rattled global financial markets, with even Trump's fellow Republicans fretting about the potential economic impact on U.S. businesses and consumers.
U.S. stocks, oil and Treasury yields rose on Thursday afternoon on reports that the two sides were getting closer to a deal.
But Vice President Mike Pence said discussions would continue "in the days ahead" and that Mexico had to take "decisive action" to avoid tariffs. The decision on whether to move forward with the tariffs would be up to Trump, he said.
Mexico has offered to send up to 6,000 members of its national guard to secure its southern border with Guatemala to contain migrant flows, according to two people with knowledge of the matter. A deal could also include a provision to make it easier for the United States to deport Central American asylum seekers, the Washington Post reported.
Mexico's finance ministry said it blocked the bank accounts of 26 people for "probable links with human trafficking and illegal aid to migrant caravans."
Bloomberg News, citing people familiar with the matter, reported that the United States was considering a delay in the tariffs to allow for more negotiations.
In response to the report, the White House said its position on the Monday deadline had not changed. "We are still moving forward with tariffs at this time," said spokeswoman Sarah Sanders.
Talks are set to continue at the State Department on Thursday evening, CNBC reported. With Trump on a trip to Europe until Friday night, an agreement by the U.S. side is not expected on Thursday, however.
If the tariffs go ahead, the United States would be in a serious trade dispute with both China and Mexico - two of its three top trading partners.
Trump said on Thursday he would decide whether to carry out his threat to hit Beijing with tariffs on at least $300 billion in Chinese goods after a meeting of leaders of the world's largest economies this month.
Officials of the U.S. Federal Reserve and International Monetary Fund separately warned that global trade tensions and rising tariffs posed an increasing risk to decades of U.S. expansion, as well as to the global economy.
Analysts warn that tariffs could spark a recession in Mexico. Credit ratings agency Fitch downgraded Mexico's sovereign debt rating on Wednesday, citing trade tensions among other risks, while Moody's lowered its outlook to negative.
Mexican President Andres Manuel Lopez Obrador struck a positive note on Thursday morning, saying the U.S. authorities had not "closed themselves off to dialogue."
Nevertheless, Mexican officials have prepared a list of U.S. products that may face retaliatory tariffs if talks do not end in agreement.
The tariffs would target U.S. products from agricultural and industrial states regarded as Trump's electoral base, a tactic China has also used with an eye toward the president's 2020 re-election bid.
The head of the U.S. House of Representatives Ways and Means Committee vowed to take steps to block the tariffs.
"If the president does declare a national emergency and attempt to put these tariffs into place, I will introduce a resolution of disapproval to stop his overreach," panel chairman Richard Neal, a Democrat, said.
U.S. hog farmers fear Mexico could hit back on products like pork if the tariffs go ahead next week. Mexico bought about $1.5 billion worth of American hams and other pork products in 2017, making it the sector's top export market by volume.
"People are really scared," said Nick Giordano, vice president and counsel for global government affairs at the National Pork Producers Council. "This is generating a tremendous amount of uncertainty and potentially if this goes forward, it's going to be financial turmoil."
(Graphic - Trump vows high tariffs on Mexico, https://tmsnrt.rs/2Khd82D)
(Reporting by Roberta Rampton in Washington and Dave Graham in Mexico City; Additional reporting by Alexandra Alper, Susan Cornwell and Lesley Wroughton in Washington, Anthony Esposito and Diego Ore in Mexico City and Tom Polansek in Chicago; Writing by Alistair Bell and Rosalba O'Brien; Editing by James Dalgleish and Sonya Hepinstall)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Jun 07, 2019 04:06:42 IST