(Bloomberg) -- President Donald Trump said there’s a “good chance” the U.S. will reach agreement to avert imposing trade tariffs on Mexico and that the deal would require the country to buy more U.S. agricultural products.
But Trump also warned in a tweet on Friday that if there’s no accord, Mexico will begin paying 5% tariffs on all goods sent to the U.S. starting Monday.
“If we are able to make the deal with Mexico, & there is a good chance that we will, they will begin purchasing Farm & Agricultural products at very high levels, starting immediately,” Trump wrote without specifying the terms. “If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!”
The peso extended its advance against the U.S. dollar on Trump’s tweet, while Treasuries further pared their gains.
The U.S. plans to issue notice Friday to pave the way for tariffs on Monday, but could decide before then to delay the move as talks continue over a surge in illegal migration, a top White House aide said.
Negotiators from the two countries resumed talks in Washington on Friday aimed at reaching a deal.
Despite progress so far, “there’s a long way to go still, that’s the bottom line. And so the legal teams are talking today, and we’ll see how that progresses,” Vice President Mike Pence’s chief of staff, Marc Short, told reporters at the White House.
The notice for the tariffs is expected to be published Friday, he said. “But I think that there is the ability, if negotiations continue to go well, that the president can turn that off at some point over the weekend.”
Trump is returning on Friday from a week-long trip to the U.K., France and Ireland. Mexican officials have sought a delay for the tariffs to have more time to negotiate a response to the migration surge, but the U.S. has made clear that the final decision is up to Trump.
As of now, “we’re moving forward with the tariffs and they will go into effect Monday,” White House Press Secretary Sarah Huckabee Sanders told reporters Friday on Air Force One before departing Ireland.
Meetings have gone well and progress has been made, Sanders said. Trump is getting regular updates from Pence, Secretary of State Michael Pompeo and Acting White House Chief of Staff Mick Mulvaney, she said.
Mexican President Andres Manuel Lopez Obrador said earlier Friday he’s optimistic the countries will reach an agreement.
“Unfortunately, there’s a mixing of migration with commercial matters,” he said. “It’s not taking into account what’s happening in Central America, the profound crisis taking place.”
Short said that Mexico arrived at meetings on Wednesday with proposals that were “wholly insufficient.” Then, on Thursday, Mexico showed openness to some U.S. proposals and the administration was “more encouraged,” Short said. White House Counsel Pat Cipollone is leading talks Friday, Short said in a separate interview with Fox News.
More than 144,000 people were apprehended after illegally crossing the southern border in May or were refused entry to the U.S. That’s the most in a single month in at least five years; the number has grown every month since January.
In one proposal, Mexico would deploy 6,000 national guard troops to its own southern border region to discourage migrants from crossing into the country from Guatemala, Foreign Minister Marcelo Ebrard said on Thursday.
Trump, in an interview that aired Thursday night with Fox News, criticized Republicans who have spoken out against his tariff threat against a top trading partner. Last year, the U.S. negotiated a new trade deal with Mexico and Canada that still requires lawmakers’ approval.
“They’re hurting a deal. They should be saying, we’re with the president, we’ll do whatever he wants to do, and Mexico would fold like an umbrella,” Trump said.
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