3 ways Trump can slap tariffs on China and Mexico

11/14/16 CNN Money 

pesoPresident-elect Donald Trump has threatened to slap big tariffs on China and Mexico to help bring jobs back to America.

At first glance, it may seem hard to do without backing from Congress. But actually, Trump doesn’t even need Congress to approve it.

True, the Constitution gives Congress the right to impose tariffs on other nations. However, several complicated laws have been passed in the last 100 years that delegate that power from Congress to the president.

Trump has several options — each open to interpretation — but here are three key ways he can go after China and Mexico.

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Trump’s win has Mexico’s markets in chaos

11/09/16 Business Insider

Pesos by Flickr user Aleiex
Photo by Flickr user Aleiex

It’s no secret that a Donald Trump makes Mexico nervous. In fact, the Bank of Mexico held an emergency meeting on Wednesday in order to discuss the peso crashing more than 13% to a record low in the wake of Trump’s electoral victory.

While the central bank opted to keep policy on hold as the peso recouped some of its losses, Capital Economics Latin America Economist Adam Collins says his firm has penciled in a half point hike in interest rates to 5.25% at next week’s meeting. That is of course as long as the peso doesn’t come under renewed pressure.

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UPDATE 1-Mexico consumer confidence rebounds in Oct from recent low

11/7/16 Reuters

Mexico’s consumer confidence index rebounded in October from a more than 2-1/2 year low hit in the preceding month, the national statistics agency said on Monday.

Consumer confidence was 85.9 in October when adjusted for seasonal factors, up from a downwardly revised 85.1 in September, its lowest since January 2014.

Late last month, preliminary gross domestic product data for the third quarter showed Latin America’s No. 2 economy was on track to post its fastest growth in more than two years after a slump in the second quarter.

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“Mexico to double berry output in four years with China’s help”

10/24/2016 EJInsight

Mexico expects its berry production to double in the coming four years with rising demand from China, the world’s second largest economy.

Mexican berry exports, which include blueberries, raspberries, blackberries and strawberries, are worth about US$1.5 billion a year, up 20 percent every year, Mario Alejandro Andrade Cárdenas, vice president of Foreign Trade of the National Agricultural Council (CNA), told EJ Insight.

“With such strong growth, which is partly contributed by China, it is likely that we will be able to double our production of berries in about four years,” Andrade said.

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Bank of Mexico Stresses Inflation Risk in Raising Rates

10/13/16 The Wall Street Journal 

Agustin_CarstensMEXICO CITY—The Bank of Mexico’s five board members all agreed last month that higher interest rates were necessary to stave off incipient inflation pressures amid a number of external and local risks to the Mexican peso, minutes of the meeting showed Thursday.

The board voted unanimously on Sept. 29 to raise the overnight interest rate target by a half percentage point to 4.75%, its third rate increase of the year, after the peso had again reached new lows against the U.S. dollar.

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Mexico’s Peso Just Can’t Catch a Break as Global Risks Abound

10/13/16 Bloomberg

pesoFor investors who think calmer seas await the Mexican peso after the U.S. presidential election, the top forecaster of the currency has some bad news: The next proverbial Donald Trump is just around the corner.

The peso is poised to lose whether or not the Republican candidate makes it to the White House in next month’s vote, says Juan Carlos Rodado, director of Latin America research at Natixis North America and the most-accurate forecaster in the third quarter, according to Bloomberg rankings.

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Mexico’s Carstens says will consider using IMF credit line -paper

10/10/16 Reuters

carstensMexico will consider using its $90 billion flexible line of credit with the International Monetary Fund in the event of an external shock, the head of the country’s central bank said in an interview published on Monday.

“It doesn’t mean we will immediately use it, but we’ll have to evaluate the circumstances and be prudent,” said central bank Governor Agustin Carstens in an interview with El Economista newspaper.

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