U.S. deal to avoid Mexico tariffs excludes 'drastic measures,' foreign minister says

The United States and Mexico struck a deal on Friday to avert a tariff war, albeit one that fell short of some of the dramatic overhauls demanded by the Trump administration.

The deal did not include a key U.S. demand that Mexico accept a "safe third country" designation that would have forced it to permanently take in most Central American asylum seekers.

Mexican Foreign Minister Marcelo Ebrard said in Washington his team had also resisted U.S. requests to send deported Guatemalans to Mexico. He said he was satisfied with the deal.

"I think it's a fair balance because they had more drastic measures and proposals at the start and we reached some middle point," he said, emphasizing the importance to Mexico of having kept safe third country out of the deal.

A joint declaration released by the State Department said the U.S. "will immediately expand" a program that returns asylum-seekers, while their claims are under review, to Mexico after they have crossed the U.S.-Mexico border. Mexico will "offer jobs, healthcare and education" to those people, according to the agreement.

Mexico has agreed, it said, to "unprecedented steps to increase enforcement to curb irregular migration," including the deployment of the Mexican National Guard throughout the country, especially on its southern border with Guatemala.

Asylum program facing ACLU challenges

Ebrard also highlighted U.S. support in the agreement for a Mexican proposal to jointly address underlying causes of migration from Central America.

The asylum program to be expanded is commonly known as Remain in Mexico, and currently operates in the border cities of Tijuana, Mexicali and Ciudad Juarez.

Under the new deal, returned asylum seekers will spend long periods in Mexican cities such as Reynosa on the Texas border, where drug cartels frequently kidnap migrants.

The program was challenged in court earlier this year by the American Civil Liberties Union (ACLU) and other rights groups which say it puts asylum seekers in danger and violates U.S. and international law.

While a federal judge ruled to halt the policy, a U.S. appeals court overturned the decision, allowing the policy to continue as the legal challenge is ongoing. Through June 5, 10,393 mostly Central Americans have been sent back to Mexico since the program started in January.

Omar Jadwat, director of the ACLU's Immigrants' Rights Project, said the group would continue to press its legal challenge to the policy.

'Mexico will do what they've committed to do'

U.S. Treasury Secretary Steven Mnuchin said on Saturday that the U.S.-Mexico immigration deal met President Donald Trump's objectives of fixing immigration problems on the southern U.S. border, but Trump will retain the authority to impose tariffs if Mexico fails to live up to it.

The deal averts a fiveper centtariff on all Mexican goods that was due to start on Monday.

"We now have an agreement that we believe is going to fix the immigration issue. And that was extremely important to the president," Mnuchin told Reuters in an interview on the sidelines of a G20 finance meeting in Fukuoka, Japan.

Mnuchin, who said he participated in a call with Trump just before the deal was announced, said the president would retain the right to impose tariffs if Mexico did not keep its commitments.

"Our expectation is that Mexico will do what they've committed to do and our expectation is that we won't need to put tariffs in place, but obviously if that's not the case, the president retains that authority."

China up next?

Duties on Mexico would have left the United States fighting trade wars with two of its three largest trading partners, and would further unnerve financial markets already on edge about tariffs and a global economic slowdown.

The United States slapped tariffs of up to 25 per cent on $200 billion US in Chinese imports last month, prompting Beijing to levy its own tariffs on $60 billion in American goods. Trump said on Thursday he would decide later this month whether to hit Beijing with tariffs on an additional list of $300 billion in Chinese goods.

Mnuchin said he planned to have a private conversation with the head of China's central bank, Yi Gang. In a G20 group meeting later in the day, the two were seen exchanging friendly remarks, but there were no fresh signs Beijing is ready to compromise in the dispute over trade and technology.

"From our perspective of where we are now, it is a result of them backtracking on significant commitments," Mnuchin said. "I don't think it's a breakdown in trust or good or bad faith. ... If they want to come back and complete the deal on the terms we were negotiating, that would be great."

Mnuchin said he had no direct message to give to Yi, who has participated in the 11 rounds of talks so far on resolving the dispute between the world's two largest economies over technology and trade.

He said there were no plans for trade talks in Washington or Beijing beforeTrump and Xi Jinping are due to meet in Osaka for the G20 summit on June 28-29.

"This will be a one-on-one with Gov. Yi to talk alone about the trade issues," Mnuchin said. But he added, "I would expect the main progress will be at the G20 meetings of the presidents."