MEXICO CITY \u2014 Amid one of the worst crises in U. S.-Mexico relations in years, President Trump and President Enrique Pe\u00f1a Nieto spoke by phone Friday morning for about an hour, a conversation that Trump said was \u201cvery, very friendly\u201d but one he suggested was a prelude to tough negotiations over what he described as an unfair trade relationship.
\u201cWe had a very good call,\u201d Trump said in a joint news conference with visiting British Prime Minister Theresa May. \u201cI have been very strong on Mexico. I have great respect for Mexico. I love the Mexican people.\u201d But he quickly added that \u201cMexico has outnegotiated us and beat us to a pulp. They\u2019ve made us look foolish.\u201d
Trump said: \u201cThe border is soft and weak. Drugs are pouring in. And I\u2019m not going to let that happen.\u201d
He said his talk with Pe\u00f1a Nieto \u201clasted for about an hour\u201d and that \u201cwe are going to be working on a fair relationship, a new relationship.\u201d
Although Trump said that \u201cit was a very, very friendly call,\u201d he also stressed that \u201cwe are going to be renegotiating our trade deals.\u201d He said negotiations with Mexico will take place \u201cover the coming months\u201d to ensure that the United States does not \u201close\u201d on trade.
Pe\u00f1a Nieto\u2019s office said the two leaders had a \u201cconstructive and productive conversation\u201d about the bilateral relationship, including the issue about the U. S. trade deficit with Mexico, the importance of \u201cfriendship\u201d between the two countries, \u201cand the need of our countries to work together to stop drug trafficking and the flow of illegal weapons.\u201d
On the issue of paying for a U. S. border wall that Trump has vowed to build, the Mexican statement said both sides recognized their differences of opinion and that they agreed to \u201cresolve their differences\u201d as part of ongoing discussions about the relationship.
\u201cThe presidents also agreed for now not to talk publicly about this controversial issue,\u201d the statement said.
A subsequent White House statement echoed the Mexican one, saying that \u201cboth presidents recognize their clear and very public differences\u201d on paying for the border wall \u201cbut have agreed to work these differences out as part of a comprehensive discussion on all aspects of the bilateral relationship.\u201d However, the White House statement stopped short of saying outright that Trump would no longer talk about the payment issue publicly.
Trump has vowed to force Mexico to pay for his border wall, which independent experts have said could cost as much as $25 billion. Trump did not mention the issue in his joint news conference with May.
Pe\u00f1a Nieto on Thursday canceled a planned trip to Washington, after Trump reiterated his insistence that Mexico pay for the wall.
Trump\u2019s decision to move forward with building the wall and his threats to dismantle the North American Free Trade Agreement, or NAFTA, have opened a serious rift in relations between the two neighbors.
Earlier Friday, Mexican business leaders and politicians warned of economic disaster and possibly unrest if trade ties between the two neighbors are disrupted by new measures proposed by the Trump administration.
Some business executives and officials in Mexico are calling for retaliatory plans.
Mexico\u2019s economy was sluggish even before the prospect of a renegotiation of NAFTA, which has led to a large jump in commerce with its largest trading partner. The value of the peso has fallen 13 percent since the election and is plumbing historic lows against the dollar.
Economists have downgraded prospects for economic growth. A rise in gas prices that started earlier this month, part of reforms by Pe\u00f1a Nieto to wean the country off gas subsidies, sparked looting, roadblocks and clashes between protesters and police. If Mexico goes into a recession, as some economists have predicted if a trade war erupts with the United States, this could lead to further violence in a country already on edge.
\u201cWe might have unrest,\u201d former president Vicente Fox said in an interview this week. \u201cIf you have a poor Mexico, yes. If there is hunger, yes. If unemployment comes back to high levels, yes, we will have problems. And the consequences will hit right back on the United States.\u201d
Mexico\u2019s exporters rely heavily on the United States market. Northern Mexico has transformed in recent years into a robust manufacturing belt that produces automobiles, flat-screen televisions and countless other products.
Major American corporations are as common as cactus in the northern Mexican deserts.
The tensions have left officials on both sides of the border calculating their next moves in a dispute that potentially puts one of the North America\u2019s critical economic partnerships in the balance.
Trump appeared to tighten the screws with a combative tweet, while Mexican politicians have rallied around Pe\u00f1a Nieto, who is still deeply unpopular but found himself basking in praise after calling off a meeting with Trump.
Pe\u00f1a Nieto made the decision after Trump suggested he should not come to Washington if Mexico remained unwilling to pay for Trump\u2019s planned border wall.
The president of Mexico\u2019s national conference of governors, Gov. Graco Ramirez of Morelos, told a Mexican newspaper that Trump had declared \u201cwar\u201d on Mexico.
\u201cWith Trump, dialogue is exhausted,\u201d Ramirez told El Universal. \u201cIt doesn\u2019t make sense to sit down with him. He doesn\u2019t change his attitude or his position.\u201d
Foreign Minister Luis Videgaray, who had flown to Washington this week in preparation for Pe\u00f1a Nieto\u2019s visit, told a news conference Thursday at the Mexican Embassy that Trump had effectively impugned \u201cthe dignity of the Mexican people.\u201d Paying for the wall, he said, was \u201cabsolutely impossible.\u201d
\u201cThere are themes that are not part of a negotiation strategy and are totally unacceptable,\u201d he said.
Trump seemed unmoved by the outcry from Mexico. On Friday, he tweeted: \u201cMexico has taken advantage of the U. S. for long enough. Massive trade deficits & little help on the very weak border must change, NOW!\u201d
The growing rift between the two neighbors, who share a 2,000-mile border and half a trillion dollars in annual trade, comes amid a possible renegotiation of the North American Free Trade Agreement, which has been in place for more than two decades.
Mexican business executives and officials noted that a 20 percent tax on imports from Mexico \u2013 an idea floated Thursday by White House spokesman Sean Spicer \u2013 would make those products more expensive for American consumers. Some expressed exasperation that so much effort must be expended to convince the United States about the benefits of free trade.
\u201cIt\u2019s paradoxical,\u201d Juan Pablo Casta\u00f1on, the president of Mexico\u2019s Business Coordinating Council, a coalition of business groups, said in an interview. \u201cTwenty-five years ago, the United States convinced Mexicans about free trade. Today we\u2019re trying to convince Americans about free trade.\u201d
Casta\u00f1on said Mexico should reciprocate on any U. S. tax or tariff. If the United States negotiates with Mexico as a sovereign and respected partner, he said, then both countries can become more competitive and prosperous. If not, then \u201cthe first option is not to have NAFTA.\u201d
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