Mexican President Andres Manuel Lopez Obrador reiterated on Sunday the need for oil independence as his government said it would tender six construction contracts in June for a planned oil refinery in the southern state of Tabasco.

Tensions between Mexico and the United States have been running high in recent days after President Donald Trump threatened to impose punitive tariffs on Mexican goods unless Mexico halts a surge in illegal migration.

“We, our children and grandchildren aspire to live in a free, independent, sovereign country and we do not want to be a colony of any foreign country,” Lopez Obrador told a cheering crowd at an event to mark the start of the refinery’s construction.

“The most important thing at this moment in time is producing petroleum,” he added, saying the country needed to work toward “energy self-sufficiency.”

Much of Mexico’s gasoline need is met by U.S. imports, and Lopez Obrador wants Mexico to be able to cover its own demand.

“We have, I repeat, a good relationship with the United States, and with all governments in the world, but we do not want to be exposed and therefore it’s important that we are self-sufficient,” the president added.

Lopez Obrador has used similar language in the past when talking about oil, but his comments were lent extra weight because of the recent flare-up in tensions with Trump.

At the event, he repeated his desire to have good relations with Trump, but was at pains to say that maintaining the friendship of the American people was of paramount importance.

Mexican Energy Minister Rocio Nahle said at the same event that Mexico would tender six contracts for the plan to build the country’s first oil refinery in four decades.

“We will be tendering six construction contracts at the end of June so that all the parts that are under construction can start at the same time and we can finish the refinery in three years,” she said, without giving more details.

Investors in highly indebted state oil company Pemex, which will build the refinery, have repeatedly expressed concern that the project would divert funds from the more profitable exploration and production business. 
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Joyce Huang contributed to this report.

China says Washington bears the “sole and entire responsibility” for the breakdown in trade talks earlier this month and that Beijing won’t back down on matters of principle. In a defiant rebuttal of who is to blame, China released a white paper Sunday, arguing that it is the United States that has backtracked in the talks and that tariffs will not resolve the two country’s trade issues.

Since talks broke down earlier this month, Beijing has doubled-down, issuing its own tit-for-tat tariffs in response to Washington’s increase to 25% of a tax on $200 billion in Chinese goods. Beijing has also been stepping up anti-American propaganda through state media. On Friday, China’s Commerce Ministry announced the establishment of a “non-reliable entity list.”

That move was a response to Washington’s ban on the sale of American made goods to Huawei and 68 of its affiliates. The ban is expected to go into effect in less than 90-days.

Speaking at a press conference on Sunday, China’s vice minister of commerce Wang Shouwen said it was Washington, not Beijing that was backpedaling.

“If the U.S. side wants to use extreme pressure, to escalate trade friction, to force China to submit and make concessions, this is absolutely impossible,” he said. Wang is a member of China’s trade negotiating team.

Speaking to reporters, he said that by announcing a decision to raise tariffs earlier this month while talks were ongoing and then later launching procedures for tariffs to cover $300 billion more in Chinese goods, Washington had broken an agreement reached by President Donald Trump and Xi Jinping late last year in Argentina.

“During the consultations, China has overcome many difficulties and put forward pragmatic solutions. However, the U.S. has backtracked, and when you give them an inch, they want a yard,” he said.

In Argentina, Xi and Trump agreed to a temporary truce on raising tariffs. But there was no agreement to take that option off the table. Trump originally agreed to 90 days and later extended that period in early March citing progress in talks.

In early May, however, Trump Tweeted that talks were moving too slowly and accused Chinese negotiators of trying to renegotiate the text of the agreement.

That was one instance where the white paper argues that Washington backtracked, it also gives two other examples.

The white paper also said American negotiators “insisted on mandatory requirements concerning China’s sovereign affairs in the deal.” It was not clear what that refers to, but earlier reports have suggested that having an enforcement mechanism as part of a trade agreement between the two sides has long been a tough pill for Beijing to swallow.

In an April interview with CNBC, Treasury Secretary Steven Mnuchin said that the countries had “pretty much agreed” on an enforcement mechanism, adding that both sides would set up “trade offices.”

It is unclear when the two sides may be able to resume talks, if at all. President Trump has said he is willing to meet with Xi later this month on the sidelines of Group of 20 Nations summit in Japan. China has yet to confirm the meeting.

When asked about it on Sunday, Wang said he did not have any information to provide.

One thing that is clear from the white paper is that China cares a lot about tariffs. The white paper said that one prerequisite for a trade deal is that the U.S. should remove all additional tariffs imposed on Chinese exports and keep demands for Beijing’s purchase of goods “realistic.”

The paper gave several examples of how tariffs are having an impact on the United States and not good for either country or the global economy, but those critiques have all been part of the robust debate that is ongoing in the United States and elsewhere.

In China, however, as Beijing struggles with a slowing economy, concerns about jobs and ballooning debt, authorities have clamped down on any reporting about the trade war that strays from the communist party’s narrative.

China has also stepped up anti-American propaganda, airing decades old movies about the Korean War, which Beijing fought alongside the North against international forces led by the United States.

The Global Times claims the trade dispute “reminds Chinese of the military struggles between China and the U.S. during the Korean War.” Some state media have called the trade war a “people’s war” and there have been suggestions Chinese consumers should boycott American goods. But the effort to stir up nationalist fervor is a risky one for Beijing, analysts note.

Too much public backlash could have an impact on stability and hurt investment as well, said Liu Meng-chun, director of the Chung-Hua Institution of Economic Research’s mainland China division in Taiwan.

“The reason why there are arising calls or nationalistic sentiment is because China is to a certain degree trying to reach a consensus in society and rally support behind the government so that the country can shoulder the consequences of the breakdown of the trade talks,” Liu said.

 
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The Trump administration had taken steps in recent weeks to work with Democratic and Republican lawmakers to address concerns about the proposed United States-Mexico-Canada trade agreement — and then came the threat of a new tariff.

President Donald Trump said this past week that he would put a 5% tariff on Mexican imports unless America’s southern neighbor cracked down on Central American migrants’ efforts to cross the U.S. border.  

His recent decision to remove U.S. tariffs on steel and aluminum imports from Canada and Mexico had appeased mostly Republicans who were using their trade votes as leverage to do away with those penalties. 

The administration also had committed to meeting with a group of House Democrats to allay their concerns. That gesture created goodwill, and as House Speaker Nancy Pelosi, D-Calif., described it, put Democrats “on a path to yes.” 

Now it’s unclear where that path may lead. 

​Jobs at stake

Influential business groups fear that Trump’s threat against Mexico could derail the proposed trade agreement. 

“The last thing we want to do is put that landmark deal — and the 2 million manufacturing jobs that depend on North American trade — in jeopardy,” said Jay Timmons, president and CEO of the National Association of Manufacturers. 

The U.S. Chamber of Commerce said it was considering legal action to block the tariffs from going into effect.  

Some GOP senators are rankled, too, most notably Charles Grassley of Iowa, chairman of the Senate Finance Committee. 

“This is a misuse of presidential tariff authority and counter to congressional intent,” Grassley said. 

Congressional aides from both parties said that it’s too soon to say whether Trump’s proposal will derail the agreement. But it does make it harder for lawmakers to assess how the agreement would improve the economic landscape if the tariffs on Mexico go into place.  

Democrats seem mostly concerned with other breaking developments. 

Hours before Trump announced his tariff plan, his administration tried to set up the agreement for a possible congressional vote before the August recess. The administration completed the formal steps necessary to start the clock for submitting legislation to Congress.   

​Not ‘positive’

Pelosi said that was “not a positive step” and “indicates a lack of knowledge on the part of the administration on the policy and process to pass a trade agreement.” 

Democrats want to strengthen enforcement of labor and environmental standards in Mexico.  They have pushed for Mexico to change labor laws that have encouraged wages as low as $1 or $2 per hour at some plants, giving U.S. companies a strong incentive to move operations south of the U.S.-Mexico border. 

Mexico lawmakers have approved a law that requires secret-ballot union votes and proof of workers’ consent for contracts. Democrats in Washington want to ensure follow-through, and Pelosi still holds the final say in determining when, or whether, the agreement comes up for a vote. 

Pelosi also joined several Republican senators in slamming Trump’s tariff threat, saying it is “not rooted in wise trade policy but has more to do with bad immigration policy on his part.” 

“Yet again, the president is sowing chaos over the border instead of delivering solutions for American workers and for American consumers,” Pelosi said. 

White House counselor Kellyanne Conway said the tariffs should not jeopardize passage of the trade pact and that the president simply wants Mexico to do more to stem the flow of migrants. 

She said the White House is confident it would pass the Democratic-run House, if Pelosi put it to a vote. 

​Investors unhappy

Trump said he had the authority to impose a 5 percent levy on all goods imported from Mexico and pledged to increase those duties to as high as 25 percent if Mexico did not dramatically reduce the number of migrants crossing the border. 

Investors have responded negatively, with the Dow Jones industrial average closing Friday down roughly 355 points, or 1.4%. 

Still, Conway told reporters that “tariffs are a good way to get a trading partner’s attention, and apparently it did.” 

Mexico’s foreign relations secretary, Marcelo Ebrard, announced that he and Secretary of State Mike Pompeo would lead talks Wednesday in Washington, a move seen as potentially easing tensions and avoiding retaliatory tariffs.  

Both Mexico and Canada are moving ahead with steps toward ratifying the trade agreement. 

Canada’s foreign minister, Chrystia Freeland, indicated that it’s up to the U.S. and Mexico to work out their dispute. “This is a bilateral issue,” she said. 
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VOA News Center associate producer Jesusemen Oni contributed reporting from Washington. 

Mexico’s president suggested Saturday that his country could clamp down on migration, and he said he thought the United States was ready to discuss its threatened use of tariffs as a means to combat illegal migration from Central America.

President Andres Manuel Lopez Obrador said at a Mexico City news conference that “there is willingness on the part of U.S. government officials to establish dialogue and reach agreement and compromises.”

His comments came ahead of talks in Washington next week, and Obrador said he said he expected “good results.” He added that Mexico was willing to “reinforce” existing “measures without violating human rights.”

Mexican Foreign Minister Marcelo Ebrard said Friday that he began negotiating with U.S. officials after U.S. President Donald Trump threatened to impose tariffs on Mexican products related to the migrant surge at the border.

Ebrard said on Twitter that he had spoken to U.S. Secretary of State Mike Pompeo by phone and said face-to-face talks between the two would take place Wednesday in Washington.

“We will be firm and defend the dignity of Mexico” at the talks, Ebrard said.

Obrador also responded Friday to the U.S. tariff threats with caution, urging “dialogue” over “coercive measures.” 

“I want to reiterate that we are not going to fall into any provocation. But we are going to be prudent, and we are going to respect the authorities of the United States and President Donald Trump,” Obrador said.  

That statement followed a two-page letter to Trump made public late Thursday, similar in tone, responding to Trump’s announcement on Twitter earlier in the day that the United States would begin imposing an escalating tax on imports from Mexico. 

“On June 10, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP,” Trump tweeted. Until “the illegal immigration problem is remedied,” tariffs will continue to rise monthly, going as high as 25% by Oct. 1. 

U.S. border agents have apprehended an increasing number of people, largely from Central America, who crossed the southern U.S. border without authorization in recent months. 

In contrast to previous spikes in arrivals, recent groups have included a large number of children, prompting U.S. officials to scramble to support families and children traveling without parents — some of whom are seeking asylum.  

In an indication of the pressing demands at the border, U.S. Customs and Border Protection solicited bids for the purchase of tens of thousands of diapers, baby wipes and bottles this past week, according to documents reviewed by VOA on a government contracting website.

Trump’s announcement of the new tariffs came on the same day Mexico began the formal process of ratifying the United States-Mexico-Canada Agreement (USMCA) on trade. 

Mexico’s deputy foreign minister for North America, Jesus Seade, said such tariffs would be disastrous, expressing more alarm than the Mexican president. 

“If this threat is carried out, it would be extremely serious,” he told reporters. “If this is put in place, we must respond vigorously.” 

For one trade expert, who previously served as Mexico’s ambassador to China — a top trading partner for that country and the U.S. — the timing of Trump’s tariff statement raised questions about the future of the USMCA. 

“By mixing two things — immigration and now, just lately, drug flow, with trade — I think it confuses the issue,” said Jorge Guajardo, a senior director at the Washington-based international trade consulting firm McLarty Associates.  

The trade deal “was a triumph for all three countries, and now of course, that all comes into doubt,” Guajardo added. 

Some Republican members of Congress but no Democrats were consulted about White House plan, according to acting White House Chief of Staff Mick Mulvaney. 

Asked in a hastily arranged conference call with reporters about benchmarks Mexico would need to achieve to have the tariffs lifted, Mulvaney said there needed to be significant and substantial reductions in arrivals from Central America crossing into the United States. 

“We’re going to take this and look at it on a day-to-day and week-to-week basis,” said Mulvaney. “We are interested in seeing the Mexican government act tonight, tomorrow.” 

Trump has repeatedly accused Mexico of not doing enough to stop Central American migrants from traveling through the country on their way to the United States. 

The U.S. system, however, is not infallible. While the country has increased its apprehension rate at the border in recent years, U.S. border agents stop an estimated 65% to 80% of people crossing into the country without authorization, according to a 2018 DHS report.
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