25 ways Donald Trump will affect business in Mexicotony tony https://secure.gravatar.com/avatar/aa9bbdf8f1e6bbf534778ecea7c0c925?s=96&d=mm&r=g
25 ways Donald Trump will affect business in Mexico
Mexico has long been dependent on the U.S for most of its business dealings. The economy of Mexico attributes most of its revenue from dealings with the U.S and with the proposals Donald Trump has put forward, the trade relations are sure to be different which will have significant impacts. 25 ways Donald Trump will affect business in Mexico include:
Reduced business market for warehouses
Companies in the U.S stand as the biggest clients for warehouses and factory spaces in Mexico and with Trump proposing that companies come back home, the spaces will be left empty translating to loss of business.
Sourcing business partners
China may end up becoming a chief business partner for Mexico to replace the U.S which will experience its companies move back home.
Renegotiation of NAFTA
Mexico is the company that benefited the most from the NAFTA deal which promoted export from Mexico but taxed imports by the U.S which in the long run benefited Mexico.
Revocation of Free Trade agreement
The free trade agreement ensured goods and products would be produced for less in Mexico and have a favorable chance of competing in the market compared to products produced locally in the U.S.
Mexican Government Bonds
The use of Mexican Government Bonds will be limited since the favorable trade deal for Mexico will be repealed according to the proposal by Donald trump.
Weakened Mexican currency
Businesses in Mexico will have to deal with a weak currency since the country will need to attract other countries to import from them to cover the losses experienced by the new trade deal.
Mexico will suffer immigration remittances which will mean stress on resources which may impact on the national budget.
Mexico will have to cultivate local investment and encourage the funding of local businesses in a bid to cover the deficit to be experienced when the trade relations change.
Stress on national budget
Mexico will ultimately experience a stress on the national budget as the country struggles to cater to the migrants that will be forced to stay within the borders of the country.
Investment on security clearance
With Donald Trump demanding that Mexico performs pre-clearance security checks on its citizens, individuals and businesses will face more taxation if they are to relate with the U.S.
Growth of local entrepreneurship
With Donald Trump proposing a change in immigration policies, many Mexicans will be forced to stay in the home country and they will need jobs and investing in entrepreneurship will be the logical option for Mexico.
With the NAFTA deal set to be renegotiated, Mexico will have to structure its own business regulations and measures that will protect its citizens and ensure the country benefits and recovers the deficit that will be experienced with the entry of the new deal.
Regulation of the World Trade Bridge
The World Trade Bridge was a way for companies to ensure products cross over to the U.S seamlessly but with the expected regulations, business is sure to take a different route.
Isolation of the Mexican economy
With the U.S serving as the biggest destination of all trade processes by Mexico, the proposed regulations will surely isolate the economy and set it to be at the mercy of the U.S trade preferences.
Choking of local industries
The local industries in Mexico will be choked out of business with the proposed renegotiations which will mean that the local companies will be required to pay tariffs and taxes.
35% tax on Mexican-made goods
Mexican-made goods entering the U.S will be charged a 35% tax according to the proposal by Donald Trump which will mean slim margins of profit for the respective corporations.
Reduced foreign exchange
With 80% of all exports from Mexico targeted at the U.S due to the NAFTA deal, the country will face reduced foreign exchange since any export deal made will not better NAFTA.
Cost of production rises
The cost of producing products in Mexico will rise since the country will be focused on stabilizing the economy and getting supplementary income to cover deficits.
American companies will leave
American companies within Mexico will have to return to the U.S to avoid being charged a 40% tariff for United States branded exports entering the U.S from Mexico.
Return of undocumented immigrants
The return of the undocumented immigrants currently in the U.S as per the proposal by Donald Trump will mean Mexico will have to increase budgetary allocations to cater to the jobless nationals.
Decreased investments by American Multi-nationals
There will be no incentive to invest in Mexico by the American multi-nationals who had previously targeted the cheap production costs.
Sell-off in the Peso
The most significant impact that Donald Trump will have on Mexico is instigating the sell-off in the Peso which may affect the economy of the nation.
Mexicans to the U.S will be highly regulated which will mean only the skilled individuals who can work in the industries will be allowed into the U.S.
The Gross Domestic Product will decrease which will reduce the negotiating power that Mexico has with other countries within the trading block.
Decline in bilateral relations
Expansive business between corporations will be limited due to a decline in the bilateral relations.