Mexico has weapons for a trade war if dispute escalates

Mexico City

IF the trade war is coming, how would Mexico fare?

That is the question that has preoccupied politicians and business leaders here since US President Donald Trump won the election and began pursuing his agenda to impose tariffs on goods made in Mexico and to build a wall across the border.

Mr Trump has made clear his disdain for the North American Free Trade Agreement (Nafta), which has governed commerce on the continent since 1994; and Mexican leaders have said that if the terms of the renegotiation did not further their interests, they might walk away as well.

A trade dispute could have painful repercussions here in Mexico. The country relies heavily on the US market: 80 per cent of its exports are sold there, and some economists predict that a trade war could lead to a recession and spur more migration north. Others note that unrest might break out as the country is already tightly w…