As AMLO’s MORENA Party Wins Big in Mexico Election, Trump’s Tariffs Loom

As AMLO’s MORENA Party Wins Big in Mexico Election, Trump’s Tariffs Loom

The National Regeneration Movement, known as MORENA and led by Mexico President Andrés Manuel López Obrador (AMLO), won two governorships and many local elections in yesterday’s vote, which took place in six Mexican states.

The elections underscore AMLO’s popularity nearly one year after he easily won the Presidency, and his party won majorities in both houses of Congress. No Mexican President since 1997 has won such a broad mandate.

The vote marks the first since AMLO’s inauguration in December. MORENA won governorships in Baja California and Puebla. It also won mayoral offices and seats in statehouses.

“This demonstrates the capacity of López Obrador to rebuild essentially a dominant party system,” said Denise Dresser, a political scientist at the Autonomous Technological Institute of Mexico.

AMLO promised to fight corruption and help the poor. Since taking office, he has worked to end official privileges. He sold the presidential jet and banned senior bureaucrats from using chauffeur-driven cars.

“People think he is truly changing things,” said political scientist Luis Carlos Ugalde, director of Integralia Consultores, a political risk firm in Mexico City. “…In four months, if he doesn’t provide results on other themes, this early enthusiasm will diminish.”

MORENA candidates won most mayoral races, including seats in the local legislature. In Baja California, a state dealing with skyrocketing homicide rate, voters seemed most concerned about the political party PAN’s corruption and secrecy.

One Tijuanense, who showed Anthony Bourdain around Tijuana’s nightlife on the show No Reservations, offered his opinion of the local elections in Baja on Facebook.

“The political party structures in picking and nominating candidates has not changed or progressed in any form in Baja,” said Antonio Ley, a Tijuana resident and owner of San Diego-based food truck Corazon de Torta. “To say it kindly, local politics are sh*t. There has been no trickle down at least in Baja concerning the type of people that are candidates, especially for MORENA. While within the party there are folks that have been social activists, community organizers and people with their ear on the streets none are candidates. Instead, millionaires from prominent local families.”

He adds: “I don’t know if the continuance of cutthroat millionaire businessmen is the answer.”

With approval ratings of 60 percent to 80 percent, AMLO now has a mandate to follow through on campaign promises.

But, first, AMLO must face off with President Trump, who is threatening tariffs on Mexico unless the nation stops the number of Central American migrants traveling through its territory to the U.S. The Mexican leader has, heretofore, sought positive relationships with Trump.

Last week, Trump slapped 5% surcharges on Mexican imports that begin June 10 as part of a demand that the country do more to stop migrants from crossing the US-Mexico border headed north.

Although the tariffs might seem like a win for American businesses, the National Association of Manufacturers (NAM) and the American Automotive Policy Council (AAPC) – a lobbying group representing powerhouse automakers such as Ford (F), General Motors (GM) and Fiat-Chrysler (FCA)-  rallied against the tariffs.

Deutsche Bank states that 35% of all U.S. auto parts are comprised of components manufactured abroad. Most of Mexico’s imports into the U.S. are auto related.

Mexico and the U.S. are among each other’s largest trading partners. The bilateral relationship was worth $671 billion last year, according to the U.S. Trade Representative’s office.

“These proposed tariffs would have devastating consequences on manufacturers in America and on American consumers,” said NAM president and CEO Jay Timmons in a statement. NAM has largely supported the president on trade, while calling for a comprehensive solution to the immigration crisis.

“We have taken our concerns to the highest levels of the administration and strongly urge them to consider carefully the impact of this action on working families across this country,” Timmons added. “Manufacturers have been working hard to secure passage of the U.S.–Mexico–Canada Agreement, and 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.”

Markets declined considerably in early U.S. early trading, as the S&P 500 (GSPC) fell 1.6%, or 32.3 points by 10 a.m. ET. The Dow (DJI) declined 1.11% – 278.92 points – while the Nasdaq fell 1.22% or 92.66 points. Deutsche bank estimates that over $5 trillion has been lost on stock markets due to trade war uncertainty.