Money is leaving the United States at record highs, over fears that the Trump administration is about to tax, or even block, cash remittances to Mexico.
Mexicans living in the United States are sending money back home, and the remittances were reportedly up 15 percent in March, compared to March 2016.
Banxico, the central bank in Mexico, reported that $2.5 billion in cash transfers were sent to Mexico from the United States in March – up from $2.2 billion in March 2016.
There were two other times when the record was beaten or matched, Fox News reported. A total of $2.6 billion in cash transfers were drained from the U.S. economy in October 2008 and sent to Mexico; in May 2006, $2.5 billion were sent to Mexico.
The amount of the average transaction has also risen, increasing a full 24 percent, from $291 to $316.
Also, the number of remittances increased 6.1 percent, from 7,517 a year ago to 7,976 this March.
After automotive exports, cash remittances are Mexico’s largest source of income, it was reported.
In 2016, Mexico’s earnings included:
- $27 billion for cash remittances (the highest on record)
- $15.6 billion from oil exports
- $17.5 billion from tourism (2015 total)
Mexico is fighting to hold on to the cash flow coming from the United States. Last week, Mexico’s foreign secretary Luis Videgaray threatened legal action to halt construction of Trump’s border wall, and also warned that any attempt to tax remittances from the U.S. would “threaten negotiations on other issues.“
“Remittances are not only a flow of foreign exchange from the macroeconomic point of view, but as we all know, it is a fundamental support for many families, particularly low-income families,” Videgaray said, adding that a tax on payments would be a “breaking point in any dialogue on other issues.”
Mexicans in the United States were already fretting over Trump’s threat to tax or shut off the money flow to Mexico even before his election, as evidenced in the following April 2016 report:
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