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Trump and Peña Nieto in ‘constructive’ phone call

The Mexican peso rallied on Friday after Donald Trump and Enrique Peña Nieto spoke for an hour by telephone, a day after the Mexican president cancelled his planned summit with the US president over his plans for a border wall.

“The presidents had a constructive and productive conversation regarding the bilateral relationship between both countries, including the issue of the US trade deficit with Mexico, the importance of friendship between our nations and the need for our countries to work together to stop arms trafficking and the illegal flow of weapons,” according to a joint statement released by Mr Peña Nieto’s office and the White House.

The peso, which is down more than 12 per cent since Mr Trump’s election victory in November, rose by more than 1.6 per cent on hopes that a crisis in Mexico/US relations could be averted.

The statement said the two men recognised their “clear and very public differences in position” over payment for the wall — which the Mexican presidency called “such a sensitive issue”.

“They agreed to resolve these differences as part of an integral discussion of all aspects of the bilateral relationship, and not to speak publicly about “this controversial issue”.

It did not say who initiated the call, just that it had been agreed to by their respective teams. Both presidents instructed their staff to “continue dialogue to strengthen this important strategic and economic relationship constructively”.

A planned January 31 meeting between the two leaders collapsed after Mr Trump demanded Mexico pay for his planned border wall and said there was no point even meeting if it would not. He also floated the idea of levying a 20 per cent tax on Mexican imports to pay for the barrier. His demands came as Mexico’s foreign and economy ministers were at the White House for talks with his advisers.

Mr Trump has also vowed to pull out of the North American Free Trade Agreement, which has anchored US-Mexican trade relations and led to deep commercial integration for the past quarter century, unless he can negotiate a better deal for American workers.

Mr Peña Nieto received Mr Trump at the presidential palace last August but the meeting proved a public relations disaster for Mexico. Although more conciliatory in tone, Mr Trump upstaged his host, then sparked a war of words on Twitter about whether they had discussed the wall and was back to his fiery rhetoric at a rally in Arizona the same night.

Despite the cancellation of the summit, Luis Videgaray, Mexico’s foreign minister, said channels of communication remained open.

Separately, during a press conference alongside British prime minister Theresa May, Mr Trump insisted that he and Mr Peña Nieto have a good relationship and that their call had been “very very friendly”.

Carlos Slim, the telecoms magnate who is Mexico’s richest man, on Friday called a news conference where he slammed the idea of slapping tariffs on Mexican imports, saying the cost would be borne by consumers and importers. While it was fair for the US to want to focus on certain manufacturing processes, such as high value-added goods, “to think you can return to the glorious past of the American industry . . . no longer works,” he said.

“Closing the economy is a serious risk for the US because it will make goods more expensive for American consumers and brake the development of companies and not allow them to be competitive on the world stage.”

He added: “[Mr Trump[ goes into the ring and says very clearly how he’s going to negotiate — if you’re weak, he’ll flatten you and if you’re strong, he’ll negotiate…..Trump isn’t terminator, he’s negotiator.”

Via FT