By Nomi Prins
This post How the U.K. Turned Trump’s Tweet into a $125 Million Contract appeared first on Daily Reckoning.
In the future, U.K PM Theresa May could look back on the canceled meeting between President Trump and Mexican President Peña Nieto on January 26 as the luckiest break in her political career (recent analysis on Mexico featured HERE).
A week after Trump took office, he and President Nieto called off a scheduled visit, and may have gotten close to starting a trade war between the U.S. and its third biggest trading partner. However, this cancelled meeting also sparked off a sequence of events with long lasting repercussions for both the U.K. and the EU, which we’ll examine.
As President, Trump has pursued his campaign vow to have Mexico pay for a border wall. There continues to be underlying tension between the two countries. But when Trump tweeted that he was still convinced Mexico would pay for the wall, this tension was brought even further to the surface.
The President of Mexico had a very public choice to make. Unsurprisingly, the Mexican reaction to the idea of paying for the wall was universally negative. Facing an 11% approval rating in his own country, Peña Nieto canceled the meeting with Trump.
The U.S. and Mexico trade $586 billion worth of goods and services annually. The countries also cooperate on security, migration and the environment (here’s even further connections between the two central banks). However, the proposed border wall would be over 1,000 miles and cost as much as $40 billion, according to MIT research. Trump’s plan is for the cost to be paid initially by the U.S.
The border wall plan has been questioned in the U.S. by the left, and increasingly by the right, too. This made Peña Nieto’s timing in calling off his visit particularly thorny for President Trump. Because he’s been so vocal about the border wall and campaigned heavily on the promise to build it, he doesn’t want to lose face. But he also promised to secure trade deals and jobs for the American people.
Enter British Prime Minister Theresa May. May was scheduled to visit the White House on January 27, the day after Trump’s tweet above. Trump’s rift with President Nieto provided excellent timing for May’s visit and potentially for the U.K.’s economic trajectory.
The U.S. and U.K. “Special Relationship”
May and Trump are already linked by the nationalist sentiment that brought them both to power. In the U.K., the citizens voted to leave the EU because they felt it would be beneficial to their personal economic conditions.
The Brexit vote was a show of disdain for the elites in power, who supported remaining in the more globally minded EU. The U.K. stock market, like that in the U.S., may have risen on the back of cheap money flowing in from global speculators — courtesy of central banks and ultra-low rates — but it left many Britons …read more
Source:: Daily Reckoning feed
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