June 7, 2019 / 5:58 PM / 2 months ago

U.S., Mexico resume talks to avert tariffs as deadline approaches

(Reuters) - U.S. and Mexican negotiators resumed migration talks on Friday to try to avert a potential trade war that could hurt both countries’ economies and rattle investors already nervous about Washington’s escalating battle with China.

FILE PHOTO: Trucks are seen arriving at a border customs control to cross into U.S. at the World Trade Bridge in Nuevo Laredo, Mexico June 5, 2019. REUTERS/Carlos Jasso

U.S. President Donald Trump shook global markets, Mexican officials and his fellow Republicans in Congress last week by threatening 5% tariffs on Mexican imports starting on Monday if Mexico did not do more to stem an increase in migrants heading for the U.S. southern border.

Here’s a snapshot of latest developments on Friday:

- Trump said in a tweet that there was a “good chance” the United States would be able to reach a deal with Mexico. But he added: “If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!”

- Mexico’s peso, which has been battered by fears of a trade war with its biggest market, strengthened more than 0.5% against the dollar after the tweet.

- Mexican sources said negotiators are battling to reach agreement over U.S. demands to make Mexico accept more asylum seekers under the ‘safe third country’ concept.

- The White House said the United States is on track to implement the tariffs on Monday. “Our position is still the same and we’re moving forward with the tariffs. They’ll go into effect on Monday,” press secretary Sarah Sanders told reporters.

- Marc Short, chief of staff to Vice President Mike Pence, said that while the United States was moving ahead with the tariffs, Trump could stop the process over the weekend, however. Outgoing White House economic adviser Kevin Hassett agreed. “The president’s going to ... look at a bunch of options, and weigh all the options over the weekend,” Hassett told CNBC.

- Russian President Vladimir Putin accused the United States on Friday of “unbridled economic egoism” and said Washington’s tactics would lead to trade wars and “maybe not just trade wars.” Chinese President Xi Jinping, speaking at the same event, called on world powers to protect the global multilateral trade system.

- U.S. officials officially granted Chinese exporters two more weeks to get their products into the United States before increasing tariffs on those items, according to a U.S. government notice posted online on Friday.

- Major world stock indexes jumped and U.S. Treasury yields tumbled on Friday after a slowdown in job growth fueled hopes of a U.S. interest rate cut, while hints of progress in Washington’s trade fights added to equity market optimism.

Compiled by Susan Thomas and Sonya Hepinstall; Editing by Howard Goller

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