Why Trump's fight with Mexico will backfire

Susana Gonzalez | Bloomberg | Getty Images

Employees work on the assembly line producing the new Ford Fiesta car, at the Ford Motor Co. plant in Cuautitlan Izcalli, Mexico

President Donald Trump's rhetoric on Mexico as neighbor that needs to be walled off because it is stealing our jobs and sending rapists is hyperbolic speech. It belies the reality that any significant damage to the Mexican economy will eventually hit us, the U.S., as well.

Since the election, the Mexican peso has lost 20 percent of its value and multinational companies are reconsidering plans to invest in that country. The much-touted Carrier deal to keep a manufacturing plant in Indiana, as well as the declaration that Ford would keep one of its factories in Michigan instead of Mexico are two prominent examples.

A week into Trump's presidency, his campaign rhetoric – which already inflicted serious damage to Mexico, is morphing into action.

If all of Trump's campaign promises materialize, they would break with a quarter century of increased cooperation between the two countries. The consequences would be detrimental not only for Mexico, but also for the United States. In fact, it is in the interest of the United States to help its southern neighbor do better, not worse.

Setting aside the fact that the U.S. plays an important role in some of the problems that riled Trump—for example, through its demand for drugs and supply of weapons—there are several good reasons to invest in Mexico's progress.

The first is national security. The deterioration of economic conditions in Mexico would fuel crime and illegality and undermine the ally the U.S. requires to serve as a first line of defense to protect its homeland. This would compromise, right at America's doorstep, existing cooperation regarding money laundering, drug trafficking, and terrorism. It would also antagonize the United States' third largest oil supplier, potentially making the country more dependent on less friendly and predictable sources like Venezuela.

The second is economic growth. Undermining Mexico's development would increase migration to the U.S. and reduce demand for American goods. Many American businesses would close, and Americans across the country would not only lose jobs but also have to pay higher prices. Half a trillion dollars in bilateral trade and an estimated 14 million American jobs could be jeopardized, and the effects of this would be immediately felt not just along the border states, but in the 22 states for which Mexico is the first or second main destination for their exports.

The third is political stability. According to a 2016 report by the public opinion NGO, Latinobarometer, currently less than half of Mexicans agree that democracy is better than other forms of government, and a meager 25 percent are satisfied with the quality of their democracy. Support for anti-democratic alternatives could give rise to populist and authoritarian leaders that would be less predictable to work with. These are warning signs the U.S. should pay attention to, since its interests are better served with a strong liberal democratic ally next door.

Trump might respond that the point of a wall is to prevent any of these negative spillover effects from manifesting themselves. But the belief that a wall and trade barriers would prevent this from happening is completely misguided. A physical wall already exists along more than 650 miles of the border. Virtual barriers with state of the art technology—including drones and motion sensors—have been erected as well. Neither has stopped migrants or goods from entering undetected.

As tempting as the mirage of building walls, slapping trade sanctions, and forcing "better deals" out of Mexico may be, it is in the interest of the United States to help its southern neighbor develop. Rather than understanding the bilateral relation as a zero-sum game, Mr. Trump should understand that rising tides lift all boats. Otherwise, he will create an important obstacle on the path to making America more prosperous again.

Commentary by Gustavo A. Flores-Macías, associate professor of government at Cornell University. He is the author of After Neoliberalism? The Left and Economic Reforms in Latin America. Follow him on Twitter @Gustavo_F_M.

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