Sheinbaum-Trump: "One phone call, two versions"

 

This week's German-language press focuses on the telephone conversation between Claudia Sheinbaum and Donald Trump, as well as the assessment of one year of Javier Milei's government in Argentina.

The German newspaper Süddeutsche Zeitung publishes an article about the conversation between Mexican President Claudia Sheinbaum and US President-elect Donald Trump on November 26, 2024:

"After a telephone conversation with Mexican Head of State Claudia Sheinbaum, future US President Donald Trump wrote on the Truth Social network: 'Mexico will now stop people from coming to our southern border. This will make an important contribution to ending illegal immigration into the United States. Thank you very much.' Trump described the conversation as 'constructive' and 'wonderful.'

Sheinbaum agreed to stop migration through Mexico to the United States and 'effectively close our southern border.' We also talked about what can be done to stop the massive flow of drugs into the United States and also the use of these drugs in the United States to stop,' Trump said.

Shortly afterwards, Sheinbaum spoke out with her version: 'In conversation with the president Trump, I explained to you the comprehensive strategy that Mexico is following to confront the migration phenomenon while respecting human rights,' she wrote on the X platform. With this strategy, migrants would be assisted before they reach the border. 'We reiterate that Mexico does not want to close its borders, but rather build bridges between governments and peoples,' said the president.

A few days earlier, Trump had threatened his neighbors Mexico and Canada with imposing punitive tariffs of 25 percent on the first day of his presidency. Trump accused both countries of doing very little to stop 'illegal entries' into the United States. (…).

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Sheinbaum and Trump discuss migration and security after tariff threat

Mexico’s economy minister, Marcelo Ebrard, was not impressed by the tariff threats. He said Mexico had an 80 percent chance of winning a potential tariff war against Trump. The United States depends on Mexican trade, and inflation would soar as a result of the measures announced by Trump, according to Ebrard, who called for cooperation on issues such as drug trafficking and migration.

The Mexican government recently said the U.S. is doing too little to curb illegal arms smuggling and held Washington responsible for the wave of violence ravaging the country, fueled by illegal U.S. weapons. The problem, according to Mexico, is that drug cartels are sourcing high-tech weapons from the north and thus outnumbering Mexican security forces.”

"The work of his chainsaw"

"Argentine President Javier Milei has been in office for a year. What has the libertarian anarcho-capitalist achieved in the crisis-ridden South American state, and what has he not?" asks the German magazine Wirtschaftswoche under the headline:

"(...) Milei, head of government in Argentina for a year, openly insults his political opponents on stage and uses biting rhetoric to express his concerns. With his chainsaw, he is cutting down Argentina's bloated state apparatus. He has abolished half of the ministries and introduced one for deregulation. (…).

The situation is still bad, and the Argentine economy is likely to contract again this year. Ten percent of Argentines live in extreme poverty, and almost two-thirds of children have to survive on one meal a day. (…).

Many figures now speak in favour of Milei, who has taken up the cause of reducing the state and eradicating inflation. Price increases have slowed to 2.7 percent a month from 25.5 percent a year ago. For the first time in five years, the country is in surplus. The International Monetary Fund (IMF) predicts that surpluses will increase in the coming years. Fitch raised Argentina's rating in mid-November, albeit to a weak level: CCC grade, still far from an investment recommendation, at the same level as Bolivia. But Fitch is confident that Argentina will pay its debts to the IMF and that Milei's reforms will have an impact.

More than half of the population still supports Milei's policies, due to his successes in macroeconomic stabilization and despite harsh cuts for many citizens. But Milei, who presents himself as an outsider who wants to undermine the corrupt political caste, has also realized that sometimes he has to compromise. He has no majority of his own in Congress. His alliance La Libertad Avanza has only just been officially recognized as a party.

The public construction sector is at a standstill. Unemployment is at eight percent. About four out of ten Argentines work in the informal sector, which generates little or no tax revenue. To bring foreign currency and black money into the country from abroad, Milei has allowed citizens to transfer dollars held abroad to a national account without paying taxes. Economist Maria Julia Eliossof considers that this is a false signal: many think that, at some point, they will be able to bring dollar reserves back home without paying taxes. This increases dollar reserves in the country, but the State is losing tax revenue. ‘And nobody asks where exactly the money comes from,’ he says.

To attract foreign direct investment, Milei guarantees investors a tax break for 30 years starting with an investment volume of 200 million dollars or more, regardless of who is in government.

For the head of the liberal Friedrich Naumann Foundation in Buenos Aires, Hans-Dieter Holtzmann, however, the program has a crucial drawback: it cannot be developed as long as capital controls remain in place and the peso is overvalued. Milei has not yet freed the peso-dollar exchange rate. He is worried about winning the support of voters. Observers assume that he wants to wait until the legislative elections, in just under a year, before giving free rein to capital. If he devalues ​​the peso now, inflation will probably rise and the patience of many Argentines will run out.”

(cp/ers)