MEXICO CITY — President Andrés Manuel López Obrador of Mexico has two options in confronting the migration standoff with Washington: He can bow to President Trump’s demands, and take in tens of thousands of new asylum seekers. Or he can refuse, and face the threat of tariffs on all Mexican imports to the United States.
Both would strain his nation’s economy and weaken his standing at home.
This awkward balancing act is evident even in Mr. López Obrador’s public approach to the crisis. Trapped between competing pressures, he is calling on Mexicans to rally in the border city of Tijuana this Saturday to both defend the dignity of Mexico and, at the same time, celebrate their friendship with the United States.
The stalemate in negotiations between the two nations over what Mexico can do to halt migration through its territory — and Mr. Trump’s looming ultimatum to impose tariffs on all Mexican imports if they fail — comes at a bad time for Mr. López Obrador.
The Mexican economy is anemic and slowing. The credit agency Fitch Ratings has downgraded Mexico’s sovereign debt, citing its ailing oil company. Its currency has weakened. And its most important trade relationship — a rare bright spot in an otherwise bleak landscape — is in the cross hairs for something that has nothing to do with trade.
Economists have revised down their forecasts for economic growth this year in Mexico between 1 and 2 percent.
“You’re in trouble when you have no growth, no investment, no resources to fund investment, and you can’t borrow anymore,” said Carlos Pascual, a former United States ambassador to Mexico and a senior vice president at IHS Markit, an energy consultancy.
And Mr. Lopez Obrador, who was elected on a promise to transform Mexico, tackling poverty and inequality, is finding his ambitions are expensive.
He has doubled pensions for the elderly, granted stipends to unemployed youth, paid a princely sum to cancel a new airport project launched by his predecessor, and vowed to build a new oil refinery. More broadly, he has promised to rescue the ailing Petroleos Mexicanos, which has racked up an astounding $100 billion in debt.
The new president is facing a brutal quagmire: how to continue avoiding a fight with his giant neighbor without plunging his country into an economic crisis that would endanger his plans.
To forgo the tariffs, which are set to start at 5 percent on Monday but escalate each month to 25 percent, the government of Mexico has offered to deploy thousands of national guardsmen to patrol its border with Guatemala.
But a deal now hinges on whether the nation will agree to an overhaul of immigration protocols that would force migrants to seek asylum in the first foreign country they enter, according to American and Mexican officials.
That would mean Guatemalans — who make up the largest portion of migrants — would have to seek asylum in Mexico, rather than the United States. Hondurans and Salvadorans, meanwhile, would be forced to seek asylum in Guatemala.
The move, which has not yet been approved, could leave Mexico dealing with tens of thousands of new asylum-seekers — a prospect that could overwhelm the country in a variety of ways, not simply economic.
“Granting this to the U.S. so quickly would undermine our autonomy to decide our own immigration policy, and also endanger peoples’ lives,” said Alejandro Poiré, a former secretary of interior under Mexico’s former president, Felipe Calderón. “We have to be extremely careful to give in to Trump’s demands so easily.”
Marc Short, the chief of staff to Vice President Mike Pence, said on CNN Friday morning that Mr. Trump was likely to sign a procedural order on Friday that would allow tariffs to go into effect on Monday as Mr. Trump promised. But Mr. Short said the order could be canceled if a deal with Mexico were reached.
Friday afternoon, as he flew back to the United States from his trip to Europe for the D-Day anniversary, Mr. Trump expressed optimism about the discussions, saying there is a “good chance” for a deal.
But he tweeted another warning: “If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday,” he wrote from Air Force One.
One Mexican official said the country was unlikely to accept the deal Mr. Trump was offering. If tariffs of 5 percent were to go into effect, the official said, the economy could absorb the blow. But, the official added, in the United States, Republican opposition to the tariffs, and the ire of the business community, would dampen Mr. Trump’s resolve.
Still, it is not out of the question that the Mexicans might accept the proposal, no matter how outwardly damaging. In the past, the administration has publicly rejected migration proposals by the Trump administration only to later to go along with them. And this, in turn, has emboldened the Trump administration to raise the stakes of its demands.
Consider The Migrant Protection Protocol, often referred to as the Remain in Mexico plan. The initiative allows asylum seekers to the United States to wait out their court proceedings in Mexico.
After rejecting the idea publicly, Mexico eventually went along with it. And then, after vowing to limit the numbers and locations of those sent back to Mexico, the nation bowed to pressure on that as well.
Most Mexicans think agreeing to be a first country of asylum for migrants would be the wrong move — in part because doing so would not guarantee there would be no new demands in the future.
“Trump lives off confrontation and conflict,” added Mr. Poiré, the former Mexican interior secretary. “That is his core political strategy and when there is concession, he will immediately look for the next agenda and excuse to pick a fight with Mexico.”
Mr. López Obrador has, for the moment, maintained his friendly, optimistic tone. He has said he believes an agreement will be reached, and has insisted on amicable relations with the United States. But the consistent provocation of Mexico by Mr. Trump has long worried experts.
The nationalism and suspicion felt by an older generation of Mexicans toward the United States — which gave way to a strong bilateral relationship and economic cooperation in the post-free trade era — could easily be stoked.
“Up until two generations ago, most Mexicans, like myself, grew up accustomed to feeling deeply suspicious of the United States,” said Héctor Villarreal, a professor at the Monterrey Institute of Technology and Higher Education in Mexico. “We were experiencing a new generational shift and a really positive era of considering the U.S. our neighbor and our partner.”