The press has been ablaze with reports that Mexico is stonewalling against Trump’s demands that they pay, in one form or another, for the wall. Some speculate that the wall will not be built at all. But research by Disobedient Media indicates that not only will the wall be built, but that it has strong support among certain Mexican business interests such as cement producer Cemex who has been actively lobbying to ensure that Trump and his allies take office and begin construction.
I. Cemex Is Best Positioned To Benefit From The Wall, And Does Not Have A Major Competitor In The United States
According to information published by the Global Cement Directory, Cemex is the largest producer of cement in North American and does not have any American competitors of equal size. It has been described in a diplomatic cable released by Wikileaks as being one of “Mexico’s monopolists” with a market share of 87.6%. Data collected using the installed capacity of companies’ integrated cement plants shows that the US does not even break the top ten list of cement producers globally. Cemex, however, ranks fifth, far ahead of their only Western competitor in Brazil.
- Source: Global Cement Directory
Cemex is a major producer, with plants and operations in over 50 countries worldwide. It has acquired a number of assets in the United States. With quarries on both sides of US-Mexico border it is positioned better than any other firm to act as the main supplier of raw materials for Trump’s wall. The map below shows the location of quarries belonging Cemex and other corporations on the border.
- Source: Financial Times
The logistical and economic nightmare of having to move cement further than 200 miles means that Cemex is ideally positioned to be the primary supplier for Trump’s wall. Additionally, contracting with dozens of American companies to provide cement would greatly complicate the building process. Trump, a man who prides himself on completing projects under budget and ahead of schedule, is unlikely to shun Cemex when seeking materials.
While Trump has made the creation of American jobs the central selling point of his Presidency, he has also stated that the wall will “help” Mexico. In the case of Cemex, it becomes clear how the wall will, at least in part, help Mexico: no matter which country pays for it, some of the funds will return to Mexican firms who help the United States with construction. Contracting with Cemex for the concrete used to build the wall is a win-win situation for both Cemex and Trump. Cemex employs thousands of Americans in their U.S. operations. By contracting with Cemex, Trump is able to deliver on his promise not just to benefit Mexico financially, but to also help ensure that American jobs are retained and possibly more created by Cemex as it ramps up operations to meet American textile demands for the wall.
II. How Cemex And Trump Mutually Benefit From The Wall
Donald Trump’s presidential victory signals a new direction in the relationship between the United States and Mexico. Beyond the wall, both states stand to fare well from Trump’s plans to overhaul the U.S. economy and renegotiate America’s trade deals. Financial sources are already beginning to speculate that Mexico could help the United States return a greater percentage of its trade deficit to North America. At the moment, over 90% of America’s trade deficit is held by countries outside the continent.
At the same time, companies such as Cemex will benefit from the weakening Peso, which has dropped since Trump’s election. The dropping Peso has been held out by some as a sign that Trump’s Presidency is having a negative effect on Mexico. However, the weakened currency actually makes the products sold by companies such as Cemex more attractive to foreign buyers. Not only will the weak Peso make a better deal for Trump and the United States, but it also gives added assurance to Cemex that their concrete will be used to build the wall. The payout, estimated to be over $700 million for concrete and $240 million for cement, would be greatly welcomed by Cemex in the aftermath of their first reported quarterly profit in over seven years as they ride a surge in their company’s valuation on the stock market.
- Source: seekingalpha.com
Cemex is one of many building material companies who have seen a major rise in the aftermath of Trump’s reiteration of his desire to build the wall. Beyond operations on the border, the wall’s construction would signal a general increase in infrastructure investment.
- Source: Bloomberg
III. Cemex Provided Political Support For Trump Allies
In what appears to be a political game of deal making, a Cemex affiliated PAC run by Executive Vice President Frank Craddock was found to have engaged in a campaign of support for political candidates who were most likely to help ensure that the wall would become a reality. Information compiled by the Center for Responsive Politics from data provided by the Federal Election Commission shows that the Cemex Inc. Employee Political Action Committee donated more than 80% of its funds during the 2016 cycle to Republican candidates. The majority of the Republican recipients listed as having received donations from Cemex have either expressed political support for Donald Trump or for the policy of building a security wall on the border with Mexico. This revelation clearly indicates that Cemex sought to help ensure that Trump would have a Republican majority both in the House and Senate to make certain that construction of the wall would proceed.
Aside from the political boost Cemex’s donations have given to Trump in the long run, there is no indication that the favor was returned in any type of pay for play arrangement. However, it is interesting to note that Newt Gingrich, who supported a tariff which negatively Cemex in the 1990’s, was not offered a senior position on Trump’s staff.
The relationship between Cemex and the United States is the perfect illustration of Donald Trump’s dealmaking diplomacy. With a shrewd eye for business, Trump is able to pick out valuable regional players and encourage partnerships which will not only benefit the United States and deliver on his campaign promises, but also help inject capital into foreign firms and boost employment rates across their nations. The media on both sides of the border will likely continue to cast shadows on the likelihood of a wall and a Mexican-American agreement on how it will be funded. But as evidenced by Cemex’s rising fortunes and willingness to reach out and assist Trump financially and politically, Trump’s New Deal is one that nobody wants to refuse.
This article was originally posted at http://ift.tt/2joxaf2
via http://ift.tt/2kchetW William Craddick