1/12/2017: On Wednesday, Mexican president Enrique Pena Nieto said Mexico would take “a broad approach” to upcoming talks with the Trump Administration, “seeking a deal that would benefit both Mexico and its neighbor as his government attempted to head off the risk of an economic shock from the Trump presidency.”

That risk of economic shock has become very real. Trump’s well-publicized campaign platform threatens two mainstays of the Mexican economy: The export of people for remittances, and the manufacturing base it acquired as a consequence of NAFTA:

“All the issues that define our bilateral relationship are on the table, including security, migration and trade,” Pena Nieto said in a speech to a group of diplomats.

Central Americans Undertake Grueling Journey Through Mexico To U.S.

At roughly the same time, Trump doubled down that he would soon begin talks with Mexico on building a border wall to keep out illegal immigrants and would make Mexico reimburse the United States for construction costs. Trump also promised a major border tax on companies that moved jobs outside the United States.

Pena Nieto hurried to add that Mexico would “invest in a more secure border” but repeated that it would not pay for Trump’s wall.

Over the past 6 months, Trump’s Wall has become the equivalent of Ronald Reagan’s Star Wars program: A credible threat to the antagonist’s economic base.

The proper strategic context to interpret much of Donald Trump’s campaign bluster is “The Art of the Deal”:

“If you’re going to be thinking anyway, you might as well think big.”

Trump’s Wall is BIG, even for the Don’s standards. Sure, the length of the Great Wall of China  was 5,500.3 miles, whereas the Grand Wall of America would only measure 1,933 miles. But even without a single block of concrete being laid, it has become real:

If the president of Mexico is offering to take on fulfilling its ultimate purpose—curtailing the unchecked torrent of migrants from and through his country—it might as well be built already.

The Art of the Deal is to get the better of your opponent. Trump has created the perfect negotiating foil: A non-existent potentiality casting such shadow that the desired outcomes of any negotiations have shrunk into minor concessions.

We’re sticking to our long-term bullish shot at the Mexico Fund (MXF), taking all dithering under $14.00 in stride.