Latin America

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Trump's Dillemma on NAFTA, China - Part 2

Key points: - Trump’s dilemma is that withdrawal from NAFTA and high tariffs against China would cause enormous dislocation for American firms producing in the US; 40% of all US imports from Mexico consist of US content embodied in Mexican-assembled of Mexican-finished goods ​- US exports are highly dependent on imported inputs, e.g. a fifth of every dollar of manufactured exports consists of foreign inputs ​- US production of manufactured goods in general, and transport equipment in particular, are highly dependent on imported parts and supplies ​- The countries that send these goods to the US, whether it be Mexico or China or Canada,  are themselves part of intricate international supply chains in which their exports contain lots of foreign content, including US content ​- The global ripple effects from a trade war would be enormous

Economic Report on Mexico - February 2015

Mexican economic indicators continue to show low momentum in the short term. Our estimate of growth for 2015 remains around 2%, as weakness is now reinforced by the cut in public spending announced for this year, likely to hit investment, and subdued business expectations.