The Daily Update - All Hail the 'Nearly New' Trade Deal!!

Donald Trump has hailed the new deal with Mexico that will stem the movement of migrants to the US after he threatened to impose trade tariffs. However, on closer inspection, the deal may not be all that ‘new’ as a large percentage seems to be actions that Mexico had already promised to over the last few months. The deal states that Mexico has agreed to the ‘deployment of its National Guard throughout Mexico, giving priority to its southern border’ but the Mexican government had already pledged to do this back in March. Another part of the deal was the expansion of a program to allow asylum-seekers to remain in Mexico while their legal cases proceed, however, this had also already been agreed, this time just before Christmas last year.

Also as part of the deal, Trump boasted that Mexico agreed to ‘immediately begin buying large quantities of agricultural product from our great patriot farmers’. However, in the communique issued by the State Department – the US-Mexico Joint Declaration – no mention was made of the agricultural trade as part of the agreement.

Also over the weekend Steven Mnuchin, the U.S. Treasury Secretary, accused China of allowing its currency to devalue in a bid to offset the impact of Trump’s trade tariffs on the cost of its goods to American consumers. At the G20 finance leaders' meeting in Japan, Mnuchin said ‘It's not coincidental in my mind that the currency has moved from approximately 6.30 to 6.90’ adding ‘Traditionally to manipulate a currency, official intervention in the foreign exchange market has to be conducted in a certain way. Intervening to support the currency's exchange rate is not regarded as currency manipulation’. These remarks come on the back of his belief that trade talks between China and the US are unlikely to make any headway when the leaders meet later this month. The Treasury Secretary said Trump will try to determine whether the Chinese President was willing to head in the ‘right direction’ stating, ‘We're going to need to see action, and President Trump is going to need to make sure he's clear that we're moving in the right direction to a deal’.

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