U.S. holds out for more from Mexico in talks over tariffs, border

 U.S. holds out for more from Mexico in talks over tariffs, border

By Roberta Rampton

WASHINGTON (Reuters) - Mexican and U.S. officials resumed talks on trade and migration on Thursday, with the Trump administration resisting calls from U.S. businesses and some Republican lawmakers to ease up on a plan to impose import tariffs on its southern neighbor.

Vice President Mike Pence, who led an initial round of negotiations in Washington on Wednesday, said talks were positive but emphasized the White House still wants Mexico to commit to working harder to combat illegal immigration.

"We welcomed the efforts of the Mexican officials to offer solutions to the crisis at our southern border, but we need Mexico to do more," Pence said on Thursday.

He was echoing President Donald Trump, who said on Wednesday that "not nearly enough" progress was made in the first round of talks, and warned that the tariffs would go into effect on Monday if Mexico does not step up efforts to stem the flow of mostly Central American migrants heading for the U.S. border.

Last week, Trump said Mexico must take a harder line on migrants or face 5% tariffs on all its exports to the United States from June 10, rising to as much as 25% later this year.

The unexpected announcement rattled global financial markets and even Trump's fellow Republicans fretted about the potential economic impact on U.S. businesses and consumers who would have to absorb the costs.

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. That is a situation that U.S. business groups are keen to avoid.

GRAPHIC-Trump vows high tariffs on Mexico https://graphics.reuters.com/USA-IMMIGRATION-TRUMP/010092KD3B7/index.html

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 late 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.

MEXICO ECONOMY

Mexican Foreign Minister Marcelo Ebrard had meetings at the State Department on Thursday and staff-level meetings were scheduled to begin at 2 p.m. (1800 GMT) with Mexican officials at the White House, a White House official said.

"We are going to continue talks this afternoon. We're not done yet. I think we are advancing," Ebrard told reporters.

With Trump on a trip to Europe until Friday night, a quick agreement in the U.S.-Mexico talks is not anticipated by the U.S. side, however.

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.

The immigration issue came into sharper focus on Wednesday with news that U.S. border officers said they apprehended more than 132,000 people crossing from Mexico in May, the highest monthly total in more than a decade and reaching what officials said were "crisis" levels.

German bond yields fell to new lows on Thursday and U.S. treasury yields resumed their fall as the trade tensions doused a rally fueled by hopes for more central bank stimulus ahead of a European Central Bank meeting. [US/]

Mexican President Andres Manuel Lopez Obrador struck a positive note on Thursday.

"The U.S. authorities have behaved very well, (including) President Trump, because they haven't closed themselves off to dialogue and we hope that a deal is reached today," he told a news conference.

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.

Mexico moved to ramp up efforts to halt the flow of Central American migrants crossing the border to the United States on Wednesday, with Mexican soldiers, armed police and immigration officials blocking migrants along its own southern border with Guatemala.

It was unclear whether the steps would appease Trump, who is struggling to make good on his key 2016 presidential campaign promise to build a wall along the U.S.-Mexico border as part of a hard-line immigration stance.

Senator Chuck Grassley, Republican chairman of the finance committee, had expressed hope on Wednesday of a quick deal with Mexico but he was more cautious on Thursday.

"The fact that there wasn’t any agreement (on Wednesday) probably isn’t surprising as long as they are going to be here two or three days," said Grassley, one of several Republican lawmakers who have expressed concern about imposing tariffs on Mexico.

(Reporting by Roberta Rampton in Washington; Additional reporting by Alexandra Alper, Susan Cornwell and Lesley Wroughton in Washington and Anthony Esposito and Diego Ore in Mexico City; Writing by Alistair Bell; Editing by Bernadette Baum, James Dalgleish and Sonya Hepinstall)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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Updated Date: Jun 07, 2019 00:05:32 IST