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

US Gives Malaysia Questionable Upgrade in Human Trafficking Ranks

Malaysia’s upgrade seen as removing barrier to country’s participation in the US-led 12-nation Trans-Pacific Partnership More

Turkey, US Try to Establish Buffer Despite Differences

Coalition airstrikes in proposed zone would aim to drive out Islamic extremists, allowing targeted area to come under sway of anti-Assad rebels More

Video US: Millions Exploited by Vast Fortunes of Human Trafficking

State Department's annual report calls exploitation 'modern slavery,' brutalizing girls, women into prostitution and forcing men, women and children into low-wage jobs across the globe More

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.
US Calls Fight Against Human Trafficking a Must Wini
X
July 28, 2015 12:21 AM
The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Iran Nuclear Pact Wins Few New US Congressional Backers

Later this week, President Barack Obama returns from a trip to Africa to confront a U.S. Congress roiled by the nuclear accord with Iran, an agreement that has received the blessing of the U.N. Security Council. Days of intensive lobbying and testimony by top administration officials have won few new congressional supporters of the pact. VOA’s Michael Bowman reports.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Obama Encourages Kenya to Fix Cultures of Corruption, Discrimination

President Barack Obama bid farewell to Kenya Sunday with a major speech at as stadium outside the capital Nairobi where he called on Kenyans to change the cultures of corruption and discrimination that can hold society back. VOA East Africa Correspondent Gabe Joselow has the story.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.
Video

Video Racially Diverse Spider-Man Takes Center Stage

Whether it’s in a comic book or on the big screen, fans have always known the man behind the Spider-Man mask as Peter Parker. But that is changing, at least in the comic book world. Marvel Comics announced that a character called Miles Morales will replace Peter Parker as Spider-Man in a new comic book series. He is half Latino, half African American, and he is quite popular among comic book fans. Correspondent Elizabeth Lee reports from Los Angeles.
Video

Video California Towns Welcome Special Olympics Athletes

Cities and towns in Southern California are greeting thousands of athletes who are arriving for Special Olympics, a competition for people with intellectual disabilities. The games will run from July 25th through August 2nd. VOA's Mike O'Sullivan reports from Pasadena, California, where athletes from Namibia, Singapore and Tanzania got a rousing welcome from local residents.
Video

Video Critics of Japan Defense Policy Focus on Okinawa

In Okinawa, many locals have long complained that Tokyo places an unfair burden on the tiny island by locating most of Japan's U.S. military bases there. As Japan's government moves toward strengthening and expanding the country's defense policies, opponents of those plans are joining local protesters in Okinawa, voicing concern about where the country is headed. VOA’s Brian Padden reports from Okinawa.
Video

Video IS Uses Chemical Weapons in Syrian Attack

Islamic State militants have added a new weapon in their arsenal of fear: chemical weapons. VOA Kurdish service reporter Zana Omer was on the scene within hours of a recent attack in Hasakah, Syria, and has details of the subsequent investigation, in this report narrated by Miguel Amaya.
Video

Video Historic Symbol Is Theme of Vibrant New Show

A new exhibit in Washington is paying tribute to the American flag with a wide and eclectic selection of artwork that uses the historic symbol as its central theme. VOA’s Julie Taboh was at the DC Chamber of Commerce for the show’s opening.
Video

Video Hoverbike Flying Toward Reality

Another long-standing dream of many technological inventors is quickly approaching reality: U.S.- and British-based firms are cooperating in the development of an individual flying platform they call a hoverbike. They say it may revolutionize the concept of flying, including in the U.S. military. VOA’s George Putic reports.
Video

Video As Japan Expands Defense Role, Protests Follow

The Japanese government is moving forward with a controversial security bill that would authorize the military to fight abroad for the first time since World War II. Leaders say it is critical to defend against rising threats from China and North Korea. VOA’s Brian Padden reports from Japan on the big changes ahead, and the opposition they are drawing.
Video

Video Replacing Poppies with Coffee in Myanmar

The remote mountains of Myanmar’s Shan state are home to the second-largest opium-producing region in the world. After a drop during the 2000s, production surged in the past eight years to feed an increasing demand for heroin in China. But farmers are now making less on the crop, and the U.N. is hoping many will make the switch to growing coffee. Daniel de Carteret reports for VOA from Taunggyi.

VOA Blogs

More Americas News

El Salvador Bus Drivers Strike as Gang Violence Surges

Drivers demanding better security in wake of escalating attacks, leaving thousands of commuters stranded on streets of Central American capital
More

Brazil's Biggest Party Sticks With Unpopular Rousseff - For Now

Rousseff struggling to save her presidency amid worst economic downturn in 25 years and political crisis set off by massive kickback scandal at state-run Petrobras
More

Amnesty: Mexico Bodies Report Highlights 'Shocking' Crisis

Of the 25,000 people Mexican officials have listed as missing, more than 11,000 cases were registered since President Enrique Pena Nieto took office
More

Chile's Bachelet Asks for End of Dictatorship Silence Pact

President calls on citizens to break the silence that has covered up human rights violations during Pinochet-era
More

US Dominates Pan American Games

US won 103 gold medals and 265 medals overall after 16 days of competition in 36 sports
More

Mexico's Search for Missing Students Finds 129 Other Bodies

Bodies found in at least 60 clandestine graves, attorney general says; no remains have been linked to youths' disappearance in Guerrero state
More