Trump’s campaign promises about Mexico have sent the peso plunging

The president-elect Donald Trump built his campaign on a promise to erect a wall between the United States and Mexico, and make America’s neighbor pay for it. For this, and his suggestions that Mexicans are rapists and drug runners worthy of deportation, he’s been reviled down south.

Now, his triumph over Hillary Clinton has dealt another major blow to Mexico: The peso has been sent into free-fall, raising fears that the country’s economy could slide into recession.

Only hours after he won the election, the peso lost 13 percent of its value — its biggest plunge in more than 20 years.

“Trump’s threats to rip up a free trade agreement with Mexico and to tax money sent home by migrants to pay for building a wall on the southern U.S. border have made the peso particularly vulnerable to events in the race for the White House,” Reuters reported.

“It’s an unmitigated disaster,” Jorge Castañeda, a former Mexican foreign minister, told the New York Times. “There are very few tools to fix the relationship.”

A Trump White House, said Mexico’s central bank governor Agustín Carstens, would hit Mexico like a “Category 5 hurricane.”

You can see the market jitters that have been felt during this election campaign in this chart from Bloomberg:

Mexico is America’s biggest trading partner, and right now, what a Trump White House will mean for Mexico is deeply unclear. Trump has promised to throw out US trade deals with Mexico, including the North American Free Trade Agreement, the Economist reported. “America has not withdrawn from a trade agreement in well over a century, but doing so is within Mr Trump’s presidential powers, and he has called it ‘the worst trade deal in history.’”

The market reaction makes it pretty clear that few were expecting a Trump victory — except for maybe Mexican president Enrique Peña Nieto. When Peña Nieto invited Trump to Mexico last August, the leader’s popularity suffered. But Peña Nieto justified the move by saying it was important to build ties with Trump should the Republican win. Now, it turns out, Nieto was right.