This transcript has been lightly edited for clarity.
Interestingly enough, the imposition of tariffs in 2019 during President Trump's first term, was also a threat that he posed to then President Lopez Obrador. If the Mexican government didn't do more to stop the flow of migrants towards the United States, this ultimately led the Mexican government to deploy a large number of National Guard members to both of its borders to crack down on illegal immigration. In fact, this move had a very positive decline in terms of encounters at the US-Mexico border, which allowed the United States to avoid placing tariffs on Mexican imports. And so this time around, Donald Trump has a really good precedent to base his decisions off. The Mexican government was able to deliver clear results on immigration, although this time around, it seems like it's much more linked to fentanyl. On combating organized crime in Mexico as well as, you know, trying to stop the flow of illegal migrants into the United States.
One of the unintended consequences of the imposition of tariffs actually follows through is that if Mexico is facing, tariffs on all of its imports to the United States, it is naturally going to have to look elsewhere with other trading partners around the world to try to find more friendlier, you know, trade relations and of course, one of those countries that actually could benefit and take advantage of the situation is China. China, of course, has increased its investment in Mexico in recent years, and that has caused alarm in Washington for national security purposes and also to a lesser extent, for trade relations.
That said, it would be really difficult today not to say that it would be impossible in the near future for Mexico to really deviate from its relationship with its North American partners. And that is because since the USMCA came into force and its predecessor, NAFTA, with the as time has passed, regional supply chains are completely interdependent. They're interconnected. And in order to actually disrupt the supply chains, it would take a lot of time. Not the tariffs wouldn't have an immediate impact on the cost of goods, both in Mexico but also for US consumers. And the same holds true for Canada. But it would be something that would have to happen more in the medium term.
And so whatever decision the White House takes, it should take into consideration how this would affect the balance of trade, between North America and also what that would mean, for Mexico and Canada, looking elsewhere for more reliable trade partners in a moment where Washington is so decided to counter its international rivals like China and Russia. Canada, Mexico, are very hopeful that they will be able to bolster the border enforcement, that they have increased the presence of, you know, National Guard members, on its borders and that that will hopefully appease Donald Trump's sort of concerns on drug trafficking, as well as on immigration.
So it's it's still a question that has yet to be answered. I think all part, all parties are trying to do, you know, what they need to do in order to prevent tariffs and avoid a larger trade war within North America. But hopefully, you know, the United States and Mexico are able to work together to establish joint objectives and to also, reestablish mutual trust between their security agencies, which hopefully will lead to a more positive outcome 30 days from now.
