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LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Monday, June 3, 2019

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LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Monday, June 3, 2019 LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Monday, June 3, 2019 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk Corporate VP, Global Corporate Affairs Has Trump Gone Canada Halts Cargill Operations at Joyce Chang Global Head of Research, Too Far With New Caracas Embassy JPMorgan Chase & Co. Canada is temporarily suspending Marlene Fernández operations at its embassy in Ven- Corporate Vice President for Tariffs on Mexico? Government Relations, ezuela. Canadian Foreign Minister Arcos Dorados Chrystia Freeland said foreign Peter Hakim embassies in the South American President Emeritus, country are unable to perform Inter-American Dialogue basic functions. Donna Hrinak Page 2 President, Boeing Latin America Jon Huenemann Retired VP, U.S. & Int’l Affairs, BUSINESS Philip Morris International James R. Jones Carnival Seeking Chairman, Monarch Global Strategies Dismissal of Cuba Craig A. Kelly Property Lawsuits Director, Americas International Gov’t Relations, Exxon Mobil Carnival Cruise Line is asking a U.S. court to dismiss lawsuits by John Maisto President Donald Trump last Thursday announced that the United States would impose new Director, U.S. Education tariffs on imports from Mexico beginning June 10, saying the country has failed to stop flows U.S. citizens who claim the com- Finance Group of migrants from coming to the United States. // File Photo: White House. pany profited from nationalized Nicolás Mariscal property in Cuba. Chairman, U.S. President Donald Trump announced last week that he Page 3 Grupo Marhnos would impose new tariffs that could rise as high as 25 per- Thomas F. McLarty III Chairman, cent on all of Mexico’s exports to the United States unless POLITICAL McLarty Associates Q Mexico “substantially stops” the flow of migrants coming to Bukele Takes Carlos Paz-Soldan the United States. What effect will the tariffs have on the economies of Partner, Office as President DTB Associates, LLP both countries, and how has the private sector reacted? Will the duties, of El Salvador Beatrice Rangel which Trump announced less than two weeks after the United States Director, Nayib Bukele, a former mayor AMLA Consulting LLC reached a deal with Mexico and Canada to eliminate steel and alumi- of San Salvador, was sworn in Jaana Remes num tariffs, derail the pending ratification of the USMCA trade accord? as president of El Salvador on Partner, McKinsey Global Institute What other developments could affect the USMCA’s ratification? Will the Saturday, ending three decades of two-party rule in the Central Ernesto Revilla USMCA be ratified during Trump’s current term in office? Head of Latin American American country. Economics, Citi Page 2 Gustavo Roosen James R. Jones, member of the Advisor board, chairman Chairman of the Board, Envases Venezolanos of Monarch Global Strategies and former U.S. ambassador Andrés Rozental to Mexico: “Trump’s latest half-baked trade tweet policy in- President, Rozental & Asociados and Senior troduces a new level of uncertainty into the global economic Policy Advisor, Chatham House A outlook that doesn’t bode well for either the United States or Mexico. The Shelly Shetty Head of Sovereign Ratings, first problem is that this decision was based on very faulty information. Latin America, Fitch Second, the solution aims at the wrong target. The third is that it invites Roberto Sifon-Arevalo Managing Director, Americas tariff retaliation by Mexico and very likely other countries that will deepen Sovereign & Public Finance Ratings, the economic danger to us. And finally, it could derail movement on the Standard & Poor’s USMCA trade treaty designed to strengthen North American competi- tiveness and protect and promote vital economic interests in the United States. This appears to be motivated primarily by political considerations, Bukele // Photo: Salvadoran not economic, as a way to motivate the Trump base, which generally Government. Continued on page 2 COPYRIGHT © 2019, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Monday, June 3, 2019 POLITICAL NEWS the leftist Farabundo Martí National Liberation NEWS BRIEFS Front (FMLN). At his inauguration, thousands Bukele Sworn in of Salvadorans filled Gerardo Barrios Plaza in U.S., Mexican Officials to front of the National Palace, chanting “Yes, Meet This Week on Tariffs as President it’s possible! Nayib president!” Bukele now must contend with frequent threats by U.S. Mexican Economy Minister Graciela Márquez of El Salvador President Donald Trump, who has threatened is scheduled to meet with U.S. Commerce to cut aid to El Salvador, as well as Guatemala Secretary Wilbur Ross today in Washington Nayib Bukele, 37, on Saturday was sworn in as and Honduras, if they do not increase efforts to discuss tariffs that U.S. President Donald president of El Salvador, ending three decades to curb the flows of migrants heading to the Trump announced last week, CBS News re- of two-party rule in the Central American United States, Reuters reported. On Saturday, ported. Trump threatened to impose 5 percent nation. A former mayor of San Salvador, Bukele Trump congratulated Bukele via Twitter. “The tariffs on all Mexican goods starting June 10, won more votes than all other candidates in the United States stands ready to work with @Nay- which would gradually increase to 25 percent country’s presidential election in February and ibBukele to advance prosperity in El Salvador if Mexico did not reduce migration north. wore a blue suit without a tie to his swearing in, and the hemisphere. Congratulations President Secretary of State Mike Pompeo and Mexican at which he was accompanied by his wife, Ga- Bukele on your inauguration!” Trump tweeted. Foreign Minister Marcelo Ebrard are to meet on briela. “Our country is like a sick child, now it’s Bukele did not invite Venezuelan President Wednesday. “Problem is, they’ve been ‘talking’ up to all of us to take care of it,” Bukele told the Nicolás Maduro, Nicaraguan President Daniel for 25 years,” Trump said in a tweet. “We want crowd in his inaugural address, Reuters report- Ortega and Honduran President Juan Orlando action, not talk.” ed. “We have to suffer a little now, we have to Hernández to his inauguration, saying they lead have a little pain, assume our responsibility and “undemocratic” governments. all as brothers to bring forward that child.” He U.S. Homeland Security added that El Salvador “has suffered greatly. It is a country that has had to rebuild; it has had Canadian Gov’t Agents to Work With earthquakes and corrupt governments and yet Halts Operations at Guatemalan Authorities we continue to move forward,” the Associat- The administration of U.S. President Donald ed Press reported. During his five-year term, Embassy in Caracas Trump will deploy dozens of Homeland Security Bukele vowed to make tough decisions for the agents and investigators to the Mexico-Gua- country, which is beset by violence and poverty, Canada is temporarily suspending its diplo- temala border in an attempt to slow illegal but he gave no details. Bukele’s inaugura- matic operations in Venezuela, closing its migration to the United States, The Washington tion ended decades of rule by the right-wing embassy in Caracas and evaluating the status Post reported Friday, citing unnamed U.S. offi- Nationalist Republican Alliance (ARENA) and of Venezuelan diplomats in Ottawa, the Cana- cials. The DHS agents are to work as “advisors” to Guatemala’s national police and migration FEATURED Q&A / Continued from page 1 authorities, with the aim of deterring migrants from beginning their journey north and disrupt- opposes both immigration and fair trade. have expressed an open mind on the trade ing popular routes. About 80 U.S. law enforce- Business abhors uncertainty, and uncertainty proposal and in my judgment would like to ment personnel will also be deployed as part of will be the result unless the administration find a way to support it.” the mission. quickly clarifies some of the unknowns, such as what specifically will trigger imposition Andrés Rozental, member of or acceleration of tariffs. If the meetings the Advisor board, president of this week between U.S. Secretary of State Rozental & Asociados in Mexico Chile’s Manufacturing Mike Pompeo and Mexican Foreign Minister A City and senior policy advisor at Output Falls 1.4% in April Marcelo Ebrard and his delegation can make Chatham House: “President Trump’s threats Chile’s manufacturing output declined 1.4 per- common sense from this mess, I think that against Mexico are nothing new, but this cent in April as compared to the same month a there is a reasonably good chance that time he has tried to combine three of his year ago, even as copper production increased, Congress can approve the USMCA before the campaign promises into one huge gamble: according to government data released Friday, August congressional recess. The two key tariffs on Mexican exports as his way of Reuters reported. Copper production increased factors to make that happen are organized showing he’s reduced his country’s trade 2.3 percent year-on-year in April to 462,046 labor and House Speaker Nancy Pelosi. Both deficit, trying to force Mexico into secur- metric tons, according to government statistics Continued on page 4 agency INE. COPYRIGHT © 2019, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Monday, June 3, 2019 dian government said Sunday, The Wall Street Journal reported. Canada is among the more IN PROFILE than 50 countries
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