Updated 5 months, 2 weeks ago

What President Trump’s Mexico-bashing may look like in practice

ENRIQUE PEÑA NIETO, the president of Mexico, was roundly castigated at home for meeting Donald Trump in August. Mr Trump, then the Republican presidential nominee, is reviled south of the border for calling Mexican migrants rapists, and for promising that he would force Mexico to pay for a wall between the two countries. In his defence Mr Peña said it was important to begin a dialogue early, with a view to reducing the potential harm a Trump presidency could cause Mexico.

That strategy is about to be put to the test. In Mexico the immediate effect of Mr Trump’s victory has been to send the already weak peso tumbling to new lows. Throughout the campaign the currency reacted badly to any perceived improvements in the Republican’s chances of victory. On early Wednesday morning it fell to more than 20 to the dollar—its biggest drop since 1994—on fears about the future of trade with the United States.

The governor of the central bank, Agustín Carstens, suggested in September that Mr Trump’s arrival in the White House would hit Mexico like a “Category 5 hurricane”. The bank is widely expected to respond to the peso’s malaise by raising interest rates at least once more this year. Currently 4.75%, they could head as high as 6.75%. This tightening, which may be accompanied by cuts in public spending, could seriously hobble a Mexican economy that is already struggling in the face of reduced industrial demand in America.

That uncertainty is a minimal risk compared with the prospect of Mr Trump taking the United States out of the North American Free Trade Agreement. America has not withdrawn from a trade agreement in well over a century, but doing so is within Mr Trump’s presidential powers, and he has called it “the worst trade deal in history”. Whether he will actually want to endanger bilateral trade of $580bn a year is unclear. Mexico would have more to lose from the imposition of tariffs, given that it sends around 80% of its exports to America. But the gains accrued to America are massive, as one hopes that Mr Trump, for all his bluster, ought to know.

Cooperation on matters of security is also of vital importance, and relations in this area are currently better than at any point in the past ten years, suggests Duncan Wood, head of the Mexico Institute of the Wilson Centre in Washington, DC. Given that Mr Trump has complained about Mexican drug-traffickers coming into America, the chances of his undermining the very interactions that aim to keep them out are minimal.

Mr Peña has a tricky balance to find. Criticised for being too soft in his approach to Mr Trump earlier in the year, he may feel obliged to strike a harsher tone now. Yet that attitude would bring with it the danger of escalation from Mr Trump, who can be touchy. It would be better to identify Mexico’s policy objectives and promote ways in which the countries can work together. The disruption the next four years could cause to the bilateral relationship, though worrying, need not be apocalyptic. “The sky won’t fall,” says David Shirk of the University of San Diego, “but it will be lower.”