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Trade War Peace the US and Mexico

Author: Ian Davis - Bullion Manager

Published: 13 Jun 2019

Last Updated: 10 Aug 2019

A deal was struck to curb migration Friday night, bringing an end to President Trump’s threat to impose widescale tariffs on Mexican imports. The deal followed several tense days of negotiation in Washington.

The deal states Mexico must take strong measures to “greatly reduce, or eliminate, illegal immigration” across America’s southern border.

The deal itself is hinged on whether Mexico can dramatically reduce the amount of Central American migrants over the next month and a half.

Calculations by the Mexican government estimate exports would fall by 3.7 percent and 1.2m jobs would be lost as a direct cause of the initial 5 percent levy being imposed.

The Mexican economy is closely linked with their northern neighbours, and the potential tariffs had been causing much distress in financial markets across the globe, already unsteady due to the US – Chinese trade negotiations.

On domestic matters, President Trumps barbed comments towards the Federal Reserve’s monetary policy, claiming in a tweet the Fed does not “have a clue” appears to have boosted the gold market, increasing the price by $1.50 an ounce.

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