News / Americas

    Mexico Would Take Hit If US Debt Talks Fail

    Craftswomen work on Christmas decorations in a workshop in the village of Chignahuapan in the state of Puebla, Mexico, November 26. 2007. Some of the spheres they produce are exported to the United States.
    Craftswomen work on Christmas decorations in a workshop in the village of Chignahuapan in the state of Puebla, Mexico, November 26. 2007. Some of the spheres they produce are exported to the United States.
    If negotiations aimed at preventing the United States from sliding over the so-called 'fiscal cliff' fail, the impact could be devastating to Mexico, America's third-largest trading partner.

    The U.S. and its southern neighbor had $500 billion worth of trade in goods and services last year, mostly in electrical machinery, vehicles and crude oil. Mexico exported $15.8 billion worth of agricultural products to the United States in 201, making it the second-largest supplier of such goods.

    If U.S. President Barack Obama and Republicans in Congress fail to compromise on a deficit-cutting package of revenue increases and spending cuts, it could spark a recession, which could mean layoffs for some Mexican workers.

    "While Mexico is doing relatively well economically, the country would take a hit if debt talks fail," said Eduardo Garcia, with the Mexican financial website Sentido Común.

    "Mexico's economy would suffer quite a bit if the U.S. fails to reach an agreement and these automatic fiscal measures go into effect because [Mexico] is so integrated into the U.S. economy," he said. Thirty percent of the Mexican economy is export-based and the U.S. consumes 80 percent of those products, he added.

    In Washington Thursday, the Speaker of the Republican-led U.S. House of Representatives, John Boehner, accused President Obama of risking the "fiscal cliff" by stubbornly resisting spending cuts.

    Republicans still are not budging on Mr. Obama's demands for higher tax rates on income above $250,000 a year, despite the president's election victory and opinion polls showing support for the idea.

    The U.S. president has argued Republicans must accept higher tax rates on the wealthiest as part of any deal in order to avoid rates rising on 98 percent of Americans.

    Without an agreement, tax hikes and spending reductions will begin taking effect in early January, steps that economists warn could renew the recession.

    The Mexican economy contracted more than 6 percent during the 2008-09 U.S. financial crisis. While Garcia does not foresee such a large problem this time, he said the impact of any U.S. austerity measures would likely be immediate.

    "Economies now react very quickly to these fiscal policies that are implemented," Garcia said. "So there's no doubt that as soon as it happens Mexico will start feeling the pain and the Mexican government will probably have to implement a few extraordinary programs to contain the blow," he said.

    Mark Snowiss

    Mark Snowiss is a Washington D.C.-based multimedia reporter.  He has written and edited for various media outlets including Pacifica and NPR affiliates in Los Angeles. Follow him on Twitter @msnowiss and on Google Plus

    You May Like

    Turkey, West in Standoff Over Syrian Refugees

    Turkish government refuses to admit refugees, the first in a wave of civilians fleeing offensive by Assad regime in northern Aleppo countryside

    Jailed American Testifies About Islamist Involvement in Mumbai Attacks

    David Headley testifies via video link that Pakistan-based Islamic terror group made two failed attempts to mount strikes in Mumbai in months prior to coordinated assault

    These Are the 10 Smartest US States

    A new report breaks down the nation's best and brightest

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: mobilebay from: Texas
    December 21, 2012 8:31 AM
    I doubt that Mexico will ever have to worry. This, and several past administrations, have seen to it that Mexico is taken care of no matter what the situation is with their own people. US taxpayers must pay for the upkeep of illegal aliens from that corrupt, third world country who laughs at our laws. They disregard our immigration laws and believe they are "entitled" to all rights as "undocumented Americans."

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    German Artists to Memorialize Refugees With Life Jacket Exhibiti
    X
    Hamada Elsaram
    February 05, 2016 4:30 PM
    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video Former Drug CEO Martin Shkreli Angers US Lawmakers

    A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent. Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. Zlatica Hoke has more.
    Video

    Video Super Bowl TV Commercials are Super Business for Advertisers

    The Super Bowl, the championship clash between the two top teams in American Football, is the most-watched sporting event of the year, and advertisers are lining up and paying big bucks to get their commercials on the air. In fact, the TV commercials during the Super Bowl have become one of the most anticipated and popular features of the event. VOA's Brian Allen has a sneak peek of what you can expect to see when the big game goes to commercial break, and the real entertainment begins.
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Solar Innovation Provides Cheap, Clean Energy to Kenya Residents

    In Kenya, a company called M-Kopa Solar is providing clean energy to more than 300,000 homes across East Africa by allowing customers to "pay-as-you-go" via their cell phones. As Lenny Ruvaga reports from Kangemi, customers pay a small deposit for a solar unit and then pay less than a dollar a day to get clean energy to light up their homes or businesses.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.
    Video

    Video Apprenticeships Put Americans on Path Back to Work

    Trying to get more people into the U.S. workforce, the Obama administration last year announced $175 million in grants towards apprenticeship programs. VOA White House correspondent Aru Pande went inside one training center outside of Washington that has gained national recognition for helping put people on the path to employment.
    Video

    Video New Material May Reduce Concussion Effects

    As the 2016 National Football League season reaches its summit at the Super Bowl this coming Sunday (2/7), scientists are trying to learn how to more effectively protect football players from dangerous and damaging concussions. Researchers at Cardiff and Cambridge Universities say their origami-based material may solve the problem. VOA’s George Putic reports.
    Video

    Video Saudi Arabian Women's Sports Chip Away at Stereotypes

    Saudi Arabian female athletes say that sports are on the front line of busting traditions that quash women’s voices, both locally and internationally. In their hometown of Jeddah, a group of basketball players say that by connecting sports to health issues, they are encouraging women and girls to get out of their homes and participate in public life. VOA’s Heather Murdock reports.
    Video

    Video A Year Later, Fortunes Mixed for Syrians Forging New Lives in Berlin

    In April of last year, VOA followed the progress of six young Syrian refugees -- four brothers and their two friends -- as they made their way from Libya to Italy by boat, and eventually to Germany. Reporter Henry Ridgwell caught up with the refugees again in Berlin, as they struggle to forge new lives amid the turmoil of Europe's refugee crisis.
    Video

    Video Zika Virus May be Hard to Stop

    With the Zika virus spreading rapidly, the World Health Organization Monday declared Zika a global health emergency. As Alberto Pimienta reports, for many governments and experts, the worst is yet to come.

    More Americas News

    USOC: US Athletes Should Stay Home if Worried About Zika Virus

    United States Olympic Committee tells US sports federations that athletes and staff concerned for their health over Zika virus should consider not going to Rio 2016 Olympic Games

    Haiti's President Leaves Office Without a Successor

    Embattled Haitian President Michel Martelly left office Sunday as required by Haiti's constitution, ending his 5-year term with no one elected to replace him

    'Revenant's Inarritu wins top Directors Guild Prize

    Alejandro Gonzalez Inarritu's win, with only weeks to go before Academy Awards on February 28, race is still as wide open as ever

    Colombia: 3,100 Known Zika Cases in Pregnant Women

    But Santos says in televised address in his country that there's still no evidence definitively linking the virus to microcephaly in newborns

    Pope to OK Use of Indigenous Languages for Mass in Mexico

    Move before trip to the country next week is symbolic gestures in defense of Indian rights

    Ecuador Sacks Military Top Brass Over Questioned Land Deal

    Armed Forces apparently sold 66 lots to Environment Ministry for $48 million, but report from Attorney General's office says they were worth only $7 million