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Last month, President-elect Trump stated that if Mexico failed to stem the tide of migrants and drugs coming into the United States, he would impose a 25 percent tariff on Mexican goods imported into the United States. Mexican President Claudia Sheinbaum responded that if Trump followed through with his tariff threat, Mexico would respond with a 25 percent tariff on U.S. goods coming into Mexico.
While predictable, Sheinbaum’s response to Trump’s threats is a bad one. What she should do instead is take the following three steps:
1. Legalize all drugs in Mexico.
It is the war on drugs, which has been inspired and directed by the U.S. government, that has given rise to drug cartels and massive violence inside Mexico for the past 50 years.
Mexico used to be a peaceful nation, one where everyone felt safe taking road trips throughout the country. Border towns were prosperous tourist destinations. That was before the war on drugs. Once Mexico began ramping up the war on drugs, at the direction of U.S. officials, a black market was formed, which brought the drug cartels into existence.
Moreover, the more the Mexican government attacked the cartels, the worse the problem of violence became. That’s because the crackdown raised black-market prices and profits to exorbitant levels, which induced more violence in the effort to garner a larger share of the profits.
Thus, the drug war will never — repeat never — get rid of the drug cartels. Instead, it will continue to do the opposite. The drug war guarantees the continuation of the cartels and the continuing destruction of Mexico. To eradicate the cartels — to put them out of business immediately — there is one — and only one — solution: Bring an end to the drug war by legalizing all drugs.
If more drugs enter the United States from Mexico, so be it. If American wish to consume drugs, that’s their business, not the business of the Mexican government … and not the business of the U.S. government. It is not the legitimate business of any government to embroil itself in what people decide to possess, ingest, and distribute. The drug war has been a massive deadly and destructive racket for the United States, just as it has been for Mexico. The U.S. government should legalize drugs, just as Mexico should. If it chooses not to do so, that should not be the concern of the Mexican government.
2. Do not impose tariffs on American imports even if Trump follows through with his 25 percent tariff threat.
Tariffs are sales taxes on imported goods. If Trump imposes a 25 percent tariff, he is imposing a sales tax on the American people. That’s bad not just for Mexican producers/exporters but also for the American people.
Claudia Sheinbaum. This file is licensed under the Creative Commons Attribution 2.0 Generic license.
But why respond by doing the same thing to the Mexican people? If Sheinbaum responds to Trump’s tariffs by imposing tariffs on American producers/exporters, that’s bad for them but it’s also bad for Mexican consumers. In other words, she would be saying: We are going to punish Trump for his tariffs by harming Mexican citizens with our tariffs.
The best thing that Sheinbaum could do is not only not respond to Trump’s tariffs with her own tariffs, but also unilaterally drop all tariffs and restrictions on trade with Mexico, regardless of what Trump does. This unilateral adoption of free trade would not only shame Trump and his American “free-market” conservative supporters, it would also be among the best things she could ever do to increase economic prosperity in Mexico. Tariffs impoverish people. Free trade raises people’s standard of living.
3. Do not enforce or support the U.S. government’s immigration policy.
The U.S. government has chosen to adopt a socialist immigration system and an immigration police state to enforce it. That socialist system and that police state have given rise to decades of what the free-market economist Ludwig von Mises called “planned chaos” and to the destruction of American liberty.
Why should Mexico involve itself in making the U.S. government’s socialist immigration system and its immigration police state work? That’s the U.S. government’s problem, not Mexico’s. By helping Trump to enforce the U.S. immigration system, Mexico tramples on the rights of freedom of movement and freedom of travel to Mexico and within Mexico.
What Mexico should do instead is open its borders completely, including its southern border, by removing all restrictions on the freedom of foreigners to enter the country. It should also end all restrictions on the free movements of people within Mexico, including people traveling in caravans in a northerly direction to Mexico’s border with the United States.
Donald Trump’s threats provide Claudia Sheinbaum with one of the greatest opportunities in the history of Mexico — an opportunity to lead the world to domestic tranquility and prosperity through the unilateral legalization of drugs and the unilateral legalization of free movements of goods, service, and people within Mexico and across Mexican borders.
Conclusion
Let Trump remain mired in angry threats in his effort to make statism work. Let Mexico travel the road of liberty, harmony, peace, and prosperity through the embrace of freedom and free markets.
