Tag Archives: Mexico

‘Affluenza’ Texan, who killed 4 driving drunk, released from jail

FILE PHOTO: Ethan Couch, the so-called "affluenza" teen, is brought into court for his adult court hearing at Tim Curry Justice Center in Fort Worth, Texas April 13, 2016. Fort Worth Star-Telegram/Max Faulkner/Pool via REUTERS

By Marice Richter

FORT WORTH, Texas (Reuters) – A Texan who was dubbed the “affluenza teen” was released from jail on Monday after serving nearly two years for killing four people while driving drunk and later fleeing to Mexico with his mother, law enforcement officials said.

The case made headlines worldwide after lawyers for Ethan Couch, now 20, argued that his wealthy upbringing impaired his ability to tell right from wrong. He has moved from the Tarrant County Jail and was being processed at a probation office, jail officials said.

Couch was released a few days before his 21st birthday and will remain under strict probation supervision, the county sheriff’s office has said.

It was not clear where Couch will go upon his release. His mother is in jail for violating the terms of her bond after being charged with helping her son flee to Mexico.

“Ethan does not wish to draw attention to himself and requests privacy so he may focus on successfully completing his community supervision and going forward as a law-abiding citizen,” his lawyers, Scott Brown and Reagan Wynn said in a statement.

Couch’s father, who runs a sheet metal business, did not respond to requests for comment.

Couch was 16 and had a blood alcohol level three times the legal limit for an adult when he struck and killed four people in June 2013 with his pickup truck.

At his trial in juvenile court that year, a psychologist testifying on his behalf described Couch as suffering from “affluenza.” The psychologist said it was an affliction brought on by being spoiled by his parents and it had skewed his moral compass.

Couch was sentenced to 10 years of probation for intoxication manslaughter, sparking outrage from critics who ridiculed the affluenza defense and said his family’s wealth had kept him out of jail.

But in late 2015, when a social media video surfaced that showed him in possible violation of his drug-and-drink-free probation, he and his mother, Tonya Couch, fled for Mexico, where the two were later apprehended and deported.

In 2016, a Tarrant County judge transferred Ethan Couch’s probation supervision to the adult system, and as a condition of the transfer, ordered him to serve 720 days in jail, 180 days for each of his four victims.

That sentence was seen as the maximum possible, given the various legal mechanisms of a case that spanned the juvenile and adult systems, legal officials said.

(Reporting by Marice Richter and Jon Herskovitz; Editing by Steve Orlofsky, David Gregorio and Susan Thomas)

U.N. accuses Mexico of torture, cover-up in case of 43 missing students

FILE PHOTO: Relatives pose with images of some of the 43 missing Ayotzinapa College Raul Isidro Burgos students in front of a monument of the number 43, during a march to mark the 41st month since their disappearance in the state of Guerrero, in Mexico City, Mexico February 26, 2018. REUTERS/Henry Romero

GENEVA (Reuters) – The U.N. human rights office said on Thursday that Mexican authorities had tortured dozens of people in connection with an investigation into the 2014 disappearance of 43 students, and it called for a full inquiry.

Mexico said on Monday it had arrested a suspected drug gang member regarded as a key figure in the kidnapping and massacre of the 43 student teachers. Activists say the case is emblematic of widespread gang violence in the country.

The atrocity plunged President Enrique Pena Nieto’s government into one of its worst crises as doubts swirled around the conduct of the investigation into the case.

“The findings of the report point to a pattern of committing, tolerating and covering up torture in the investigation of the Ayotzinapa case,” Zeid Ra’ad al-Hussein, the U.N. High Commissioner for Human Rights, said in a report.

Mexico’s mission in Geneva said the ambassador was not immediately available to comment on the report, entitled “Double injustice – human rights violations in the investigation of the Ayotzinapa case”.

An initial investigation found that the students, who were on five buses, were abducted by corrupt police who handed them over to members of a drug cartel, who killed them, incinerated their bodies at a trash dump and threw the ashes into a river.

However, the official account has been widely questioned by local and international human rights experts. Only a bone fragment from one student has been found near a river.

Zeid’s office, which examined information related to 63 out of 129 people detained in connected with the case, said it had documented arbitrary detention and torture based on interviews, judicial files and medical records.

It had information on the possible torture of 51 people and “solid grounds to conclude that at least 34 of these individuals were tortured”, including one woman. But it stopped short of attributing blame for the murders.

“Ayotzinapa is a test case of the Mexican authorities’ willingness and ability to tackle serious human rights violations,” Zeid said. “I urge the Mexican authorities to ensure that the search for truth and justice regarding Ayotzinapa continues, and also that those responsible for torture and other human rights violations committed during the investigation are held accountable.”

The U.N. report calls for any evidence in the Ayotzinapa case for which there are credible indications that it was obtained under torture to be excluded or invalidated.

A team of international experts said in September 2015 that Mexico’s official account of the Ayotzinapa case did not add up, citing deep flaws in the inquiry and dismissing its claims that the victims were incinerated in a garbage dump.

In their report, the experts suggested the missing bus may have been carrying a shipment of cash or drugs.

Mexican actor Gael Garcia Bernal told the U.N. Human Rights Council in Geneva on Wednesday that crimes against humanity had been committed in Mexico “in the name of security”.

(Reporting by Stephanie Nebehay; Editing by Mark Heinrich)

Trump sets metals tariffs but exempts Canada and Mexico

FILE PHOTO: Rolled steel are seen at a Hyundai Steel plant in Dangjin, about 130 km (81 miles) southwest of Seoul June 15, 2011. REUTERS/Lee Jae-Won/File Photo

By David Lawder, Antonio De la Jara and Dave Sherwood

WASHINGTON/SANTIAGO (Reuters) – President Donald Trump pressed ahead with the imposition of 25 percent tariffs on steel imports and 10 percent on aluminum on Thursday but exempted Canada and Mexico, backtracking from earlier pledges of tariffs on all countries.

Details of the plan came from a briefing by administration officials ahead of Trump’s speech, which had been due to start at 3:30 p.m. (2030 GMT). Trump will say that other countries can apply for exemptions, according to the administration, although details of when they would be granted were thin.

Trump has offered relief from steel and aluminum tariffs to countries that “treat us fairly on trade,” a gesture aimed at putting pressure on Canada and Mexico to give ground in separate talks on the North American Free Trade Agreement (NAFTA), which appear to be stalled.

Trump has also demanded concession from the European Union, complaining that it treated American cars unfairly and has threatened to hike tariffs on auto imports from Europe.

Stock markets in Canada and Mexico rallied on the news, as did the Canadian dollar and the Mexican peso.

There was no mention of Mexico and Canada giving ground on NAFTA in the proposals.

Trump’s tariffs have triggered the threat of countermeasures from the European Union and now China. The levies aim to hit Beijing, although China exports very little of either metal to the United States.

(Additional reporting by Michael Martina, Elias Glenn, Kim Coghill, Brian Love, Nichola Saminather, Doina Chiacu and Andrea Hopkins; writing by David Stamp and David Chance; editing by Jonathan Oatis and Frances Kerry)

Big Mexico quake cuts power and damages homes; two dead in crash

People stand on the street after an earthquake shook buildings in Mexico City, Mexico February 16, 2018.

By Lizbeth Diaz and Daina Beth Solomon

MEXICO CITY (Reuters) – A prolonged 7.2 magnitude quake that rocked Mexico on Friday left nearly a million homes and businesses without power in the capital and south but the only reported deaths came when a military helicopter crashed after surveying the aftermath.

At least 50 homes suffered damage in the southern state of Oaxaca, which, along with Mexico City, is still reeling from earthquakes that caused widespread damage in September.

The epicenter was about 90 miles (145 km) from Pacific coast surfer resort Puerto Escondido in the southern state of Oaxaca and had a depth of 15.3 miles (24.6 km), according to the U.S. Geological Survey.

At least two people died when a helicopter carrying Mexico’s interior minister and the governor of Oaxaca crashed while trying to land after a tour of damage from the earthquake, officials said. The senior officials survived.

The powerful, sustained shaking on Friday gave way to 225 aftershocks, the national seismology service said, and caused widespread panic.

In Mexico City, the seismic alarm sounded 72 seconds before tremors were felt, Mayor Miguel Angel Mancera said, giving residents time to flee to the streets.

Patricia Gutierrez, a 66-year-old English teacher, was taking a nap with her 11-month-old granddaughter, Juliet, when she heard the distinctive siren.

“She recognized the sound. When I opened my eyes, I saw her eyes in terror. Her eyes were wide, like plates. She didn’t say anything,” Gutierrez said of her granddaughter.

Gutierrez managed to leave her ground floor apartment before the quake began. “I left the phone and everything except for my shoes and the baby,” she said.

Authorities said no deaths directly linked to the quake had been reported nationally.

BRICKS AND RUBBLE

The Oaxacan town of Jamiltepec appeared to sustain the heaviest impact in the southern region, with 50 homes damaged along with a church and government building, the state’s civil protection agency said.

Patients were evacuated from a hospital there and from another in the nearby town of Putla Villa de Guerrero. On a local highway, a fire ignited when two high-tension electric cables struck each other.

In the town of Pinotepa Nacional close to the quake’s epicenter, a photo obtained from Oaxaca’s civil protection agency showed a single-story building where a portion of the brick facade had crumbled into the street. A hospital was also damaged, and a collapsed structure blocked a major highway.

About 100,000 people in Oaxaca had lost power, the state’s governor said.

National oil firm Pemex said its installations were in order, including its biggest refinery 240 miles (386 km) from the epicenter. A hotel operator in Puerto Escondido said his property had no damage.

Tremors were felt as far away as Guatemala to the south.

Images in the media appeared to show bricks and rubble fallen from buildings, and products tumbling off shelves in a supermarket.

In Mexico City, tall buildings swayed for more than a minute as seismic alarms sounded, with older structures in the chic Condesa neighborhood knocking into each other, and some cracks appearing in plaster and paintwork.

The Popocatepetl volcano south of the capital sent a kilometer-high column of ash into the sky, said Mexico’s disaster prevention agency.

Two young men standing by a building that collapsed in a Sept. 19 earthquake were still hugging minutes after the tremor. People crowded in the streets, one lady in her pajamas.

Trees, overhead cables and cars swayed, and a fire truck raced down the street.

Guadalupe Martinez, a 64-year-old retiree, said she was still shaking from shock. But the quake was a far cry from the tremors that struck Mexico in September, Martinez said.

“This time it was strong, but it did not jump up and down,” she said.

(Reporting by Julia Love, Christine Murray, Michael O’Boyle, David Alire Garcia, Anthony Esposito and Stefanie Eschenbacher; Writing by Daina Beth Solomon and Frank Jack Daniel; Editing by Rosalba O’Brien, Lisa Shumaker and Tom Hogue)

Mexico to send troops to stem violence after record 25,000 murders

A soldier stands guard next to a crime scene, where men were killed inside a home by unknown assailants, in the municipality of San Nicolas de los Garza, Mexico, January 27, 2018. Picture taken January 27, 2018.

MEXICO CITY (Reuters) – Mexican officials said on Sunday the government was set to unleash a new wave of troops to crack down on criminal groups in regions where a surge in violence led to more than 25,000 murders last year.

National Security Commissioner Renato Sales said federal police troops will work with local officials to round up known major criminals and bolster investigations.

The aim was “to recover peace and calm for all Mexicans,” he said. He did not provide details on the number of federal police to be deployed.

More than 25,000 murders were recorded last year as rival drug gangs increasingly splintered into smaller, more blood-thirsty groups after more than a decade of a military-led campaign to battle the cartels.

Violence is a central issue ahead of the presidential election in July. Mexican President Enrique Pena Nieto’s ruling Institutional Revolutionary Party is trailing in third place in recent polls.

Sales said federal police troops would be deployed in the states of Colima and Baja California Sur, the resort town of Cancun and the border city of Ciudad Juarez, among others. He said more details would be forthcoming within days.

Earlier this month, the United States slapped its most stringent travel warnings on the states of Colima, Michoacan, Sinaloa, Tamaulipas and Guerrero, ranking them as bad as war-ravaged Syria, Afghanistan and Iraq.

At least 25 people were murdered in Mexico this weekend, according to officials and local media, including nine men who were executed at a house party in a suburb of the wealthy northern industrial city of Monterrey.

Masked gunmen burst into a home in San Nicholas de los Garza as a group watched a local soccer team play on television, according to state prosecutors. Seven were killed at the scene and two more died later at a hospital.

There were a wave of attacks in night spots late Saturday and early Sunday. A group of armed men killed three people in a bar in the resort city of Cancun, a Chilean tourist was killed in the Pacific beach resort of Acapulco, and two more were killed in a bar in the capital of Veracruz state.

Six more were killed in the border city of Ciudad Juarez and four more died in the border state of Tamaulipas, where at least 10 were killed during the week at outlaw road blockades and in shootouts, local media reported.

(Reporting by Michael O’Boyle and Diego Ore; Editing by Jeffrey Benkoe)

As NAFTA talks drag, Mexico suggests timeline could be extended

Flags are pictured during the fifth round of NAFTA talks involving the United States, Mexico and Canada, in Mexico City, Mexico, November 19, 2017.

By David Ljunggren and Allison Lampert

MONTREAL (Reuters) – A senior Mexican official on Friday suggested talks to modernize the North American Free Trade Agreement could be extended to give officials more time to address major disagreements threatening to undermine the $1.2 trillion trade pact.

Officials are planning an extra round of negotiations in Mexico at the end of February, according to sources close to the negotiations.

Teams from the United States, Canada and Mexico are in Montreal for the sixth of seven planned rounds on how to modernize NAFTA but progress is slow. Washington wants major changes to the 1994 pact and addressing various U.S. demands has eaten up time, officials said.

Although the process was initially scheduled to finish by the end of March to avoid clashing with Mexican presidential elections in July, Economy Minister Ildefonso Guajardo said the timeline could be extended.

“This negotiation has a window of opportunity to reach a deal between February and the end of July,” he told Reuters.

Canada, which this week presented a series of suggestions on how to unfreeze the talks, quickly welcomed the idea.

“Canada does not believe that we need put an arbitrary deadline on these negotiations at the cost of a good deal for all three countries. ‎We are happy to continue negotiating,” said a government source.

U.S. chief negotiator John Melle, asked about a possible extension, told Reuters, “I have nothing to say on that. We are pushing ahead.”

A Mexican source briefed on the talks said once the election campaign has started, negotiators could still continue their work but without holding formal rounds.

The three nations are now looking at an extra week of talks in Mexico, possibly starting Feb. 26, ahead of the last round in Washington at the end of March, said the sources.

Whether more talks can help forge an agreement is unclear, given the gulf between the United States and its two partners.

U.S. President Donald Trump’s administration, which blames NAFTA for hurting U.S. manufacturing, wants the North American content of autos to be raised.

Canada responded by suggesting that content would be higher if the value of software and other high-tech materials made by the three nations were taken into account.

An auto industry source said U.S. and Mexican negotiators found the idea interesting but gave no details. Canadian chief negotiator Steve Verheul said on Thursday “there is a lot more thinking” to do about the idea.

Mexico and Canada have dismissed a separate U.S. demand that 50 percent of all autos produced in NAFTA nations must have American-made content. They also object to the idea of a subset case that would allow one party to pull out of the treaty after five years.

(Additional reporting by Dave Graham in Mexico City; Editing by Jeffrey Benkoe)

Trump promises to ‘take the heat’ for broad immigration deal

U.S. President Donald Trump, flanked by U.S. Senator Dick Durbin (D-IL) and Representative Steny Hoyer (D-MD), holds a bipartisan meeting with legislators on immigration reform at the White House in Washington, U.S. January 9, 2018. REUTERS/Jonathan

By Jeff Mason and Richard Cowan

WASHINGTON (Reuters) – President Donald Trump said on Tuesday he was ready to accept an onslaught of criticism if lawmakers tackle broad immigration reforms after an initial deal to help the young illegal immigrants known as Dreamers and build a wall on the U.S. border with Mexico.

Trump told lawmakers at the White House he would back a two-phased approach to overhauling U.S. immigration laws with the first step focused on protecting immigrants who were brought here as children from deportation along with funding for a wall and other restrictions that Democrats have opposed.

Once that is done, Trump said, he favors moving quickly to address even more contentious issues, including a possible pathway to citizenship for 11 million illegal immigrants that is opposed by many Republicans and many of his supporters.

“If you want to take it that further step, I’ll take the heat, I don’t care,” Trump told lawmakers about a broad immigration bill. “You are not that far away from comprehensive immigration reform. And if you wanted to go that final step, I think you should do it.”

Trump campaigned for the White House in 2016 with a hard-line approach on illegal immigration, and many of his supporters consider potential citizenship for undocumented immigrants to be an unacceptable grant of amnesty.

Trump said on Tuesday he would sign a bill that gives legal status to the hundreds of thousands of undocumented immigrants brought to the country as children, known as Dreamers, as long as the bill had the border security protections he has sought, including funding for a wall.

“Now, that doesn’t mean 2,000 miles of wall because you just don’t need that … because of mountains and rivers and lots of other things,” Trump said. “But we need a certain portion of that border to have the wall. If we don’t have it, you can never have security.”

Trump and his fellow Republicans, who control the U.S. Congress, have been unable to reach agreement with Democrats on a deal to resolve the status of an estimated 700,000 young immigrants whose protection from potential deportation under the Deferred Action for Childhood Arrivals, or DACA, program ends in early March.

“A VERY PRODUCTIVE MEETING”

Under pressure from immigrant groups ahead of midterm congressional elections in November, Democrats are reluctant to give ground to Trump on the issue of the wall, his central promise from the 2016 presidential campaign.

But after the meeting, lawmakers from both parties said they would meet as early as Wednesday to continue negotiations on a deal covering DACA and border security, as well as a visa lottery program and “chain migration,” which could address the status of relatives of Dreamers who are still in the United States illegally.

“From that standpoint it was a very productive meeting,” said Senator David Perdue, a Republican. “We have a scope now.”

White House spokeswoman Sarah Sanders told reporters the broader bill with a path to citizenship was not a focus for now.

“We’re certainly open to talking about a number of other issues when it comes to immigration, but right now this administration is focused on those four things and that negotiation, and not a lot else at this front,” she said.

Republican Senator Lindsey Graham, who also was at the meeting, said negotiators in Congress still faced difficulties but it was important that Trump had shown he had “no animosity toward the Dream Act kids” and the “wall is not going to be 2,220 miles wide.”

PARTY DIFFERENCES ON BORDER SECURITY

The U.S. Congress has been trying and failing to pass a comprehensive immigration bill for more than a decade, most recently in 2013 when the Senate passed a bill that later died in the House of Representatives.

The latest immigration negotiations are part of a broader series of talks over issues ranging from funding the federal government through next September to renewing a children’s health insurance program and giving U.S. territories and states additional aid for rebuilding after last year’s hurricanes and wildfires.

Top congressional leaders did not attend the hour-long meeting. The guest list included lawmakers from both parties involved in the immigration debate, such as Graham and Democratic Senator Dick Durbin.

A majority of those protected under DACA are from Mexico and Central America and have spent most of their lives in the United States, attending school and participating in society.

Trump put their fate in doubt in early September when he announced he was ending the DACA program created by former President Barack Obama, which allowed them to legally live and work in the United States temporarily.

Steny Hoyer, the No. 2 Democrat in the House of Representatives, said a DACA bill could win support for passage even though there are differences between the parties over what constitutes necessary border security.

“Democrats are for security at the border,” Hoyer told Trump during the meeting. “There are obviously differences, however, Mr. President, on how you affect that.”

On Monday, Trump announced that he was ending immigration protections for about 200,000 El Salvadorans who have been living legally in the United States under the Temporary Protection Status program. Haitians and other groups have faced similar actions.

A congressional aide told Reuters that negotiators in Congress also have been talking about legislation that would expand TPS in return for ending a visa lottery program that Republicans want to terminate.

(Reporting by Jeff Mason and Richard Cowan; Additional reporting by Susan Cornwell, Steve Holland, Susan Heavey and Amanda Becker; Writing by John Whitesides and Jeff Mason; Editing by Leslie Adler)

Insurers to pay out record $135 billion for 2017 after hurricanes

The company logo of German reinsurer Munich Re is seen before the company's annual news conference in Munich, Germany, March 16, 2016.

By Tom Sims and Alexander Hübner

FRANKFURT/MUNICH (Reuters) – Insurers will have to pay claims of around $135 billion for 2017, the most ever, following a spate of hurricanes, earthquakes and fires in North America, according to a report published on Thursday.

German reinsurer Munich Re , in its annual natural catastrophe review, also said last year’s total losses, including those not insured, were $330 billion, the second-worst in history after 2011 when an earthquake and tsunami wreaked havoc in Japan.

Although individual events could not be linked directly to climate change, global warming is playing a role, Munich Re said. It expected more frequent extreme events in future.

“We have a new normal,” said Ernst Rauch, head of Munich Re’s Corporate Climate Center, which monitors climate change risks.

“2017 was not an outlier,” he said, noting insured losses have surpassed $100 billion multiple times since 2005. “We must have on our radar the trend of new magnitudes.”

Last year’s hurricanes Harvey, Irma and Maria in the United States and Caribbean, wildfires in California and earthquakes in Mexico destroyed homes, infrastructure and numerous lives.

The disasters also rocked global insurers. Munich Re and Hannover Re both issued profit warnings.

That dealt a blow to a sector already struggling with thin margins, stiff competition and falling prices.

Munich Re’s tally for the industry comes on the back of other estimates that underscored the severity of 2017.

In December, Swiss Re estimated global insured losses from catastrophes would hit $136 billion in 2017, the third-highest on record for the sector, with the United States hardest hit. That figure is not directly comparable to Munich Re’s estimates as it includes man-made disasters.

Reinsurers, which are in the business of insuring insurance, are experts in managing risk and rarely get caught off guard. Analysts have said reinsurers may need to take a fresh look at their risk models as the planet warms and storms become more intense.

A big question for the industry has been whether the run of catastrophes would allow them to achieve higher prices for their coverage, which have been in decline for years.

Early indications suggest modest increases. Global property reinsurance prices rose less than expected in the key Jan. 1 renewal season, with strong competition limiting increases to single digit percentages, brokers said this week.

A turnaround in prices would be the first major reversal since Hurricane Katrina in 2005.

(Editing by Maria Sheahan and Mark Potter)

Checks for free: a Mexican plan to combat poverty

Checks for free: a Mexican plan to combat poverty

By Anthony Esposito

MEXICO CITY (Reuters) – An opposition alliance in Mexico wants to launch a universal basic wage to combat the poverty that blights the lives of almost half the population, touting an experimental reform discussed globally as a solution to job losses from automation.

The center-right National Action Party and center-left Party of the Democratic Revolution are running on a joint ticket with the leftist Citizens Movement (MC) for next July’s presidential election, and the income plan is a key part of their manifesto.

Officials inside the alliance say details of the plan are still being worked out, though its contours are emerging.

A basic income of 10,000 pesos ($537) per year for everyone, including children, could be provided by consolidating funds from federal, state and municipal welfare programs, Jorge Alvarez, an MC congressman working on the plan told Reuters in a recent interview.

“If you multiply that by four or five, which is the typical size of a Mexican family, you get an annual income of 40,000 to 50,000 pesos per family, Alvarez said, adding that providing the income to children could be conditional on school enrollment.

Home to the richest man in Latin America, Carlos Slim, Mexico is laden with oil and minerals, boasts a large manufacturing base and has the world’s 15th biggest economy. But poverty has remained stubbornly stuck above 40 percent of the population for decades.

Government social development agency Coneval defines poverty as a person living on no more than 2,925 pesos a month in cities and 1,892 pesos in rural areas. The agency also takes into account other factors like healthcare and education.

Getting to 40,000 or 50,000 pesos per family could be achieved “without increasing taxes,” Alvarez said.

Still, the Organization for Economic Cooperation and Development argues that providing an unconditional basic income to everyone of working age would do little to combat poverty if not funded by extra taxes.

The idea of universal basic income has gained currency due to the increasing robotization of the workforce. Finland is running a pilot project to test whether unconditional payments could serve as a plausible alternative welfare model.

Mexico has seen job growth in recent years thanks to a manufacturing boom, and could face a smaller workforce as robots take over more tasks.

Swiss voters rejected a basic income plan in a referendum last year, while the defeated Socialist candidate in France’s presidential election this year, Benoit Hamon, championed it, saying it would be funded by a tax on robots that replace human labor.

Mexican gross domestic product was worth $1.046 trillion in 2016, according to the World Bank, but some 53.4 million Mexicans, or 43.6 percent of the population, live below the poverty line, according to Coneval.

($1 = 18.6239 Mexican pesos)

(Editing by Dave Graham and Jonathan Oatis)

U.S. trade hits nine-month high; oil prices lift imports

U.S. trade hits nine-month high; oil prices lift imports

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. trade deficit increased to a nine-month high in October due to rising oil prices and the widening of America’s long-standing deficits with China and Mexico.

The worsening trade deficit came even as exports to China and Mexico were the strongest in more than three years, which some economists said challenged the Trump administration’s argument that the United States was being disadvantaged in its dealings with trade partners.

“This leaves the Trump economics team empty handed when it comes to its mission to improve the unfair terms of trade which sent factories offshore starting a couple of decades ago,” said Chris Rupkey, chief economist at MUFG in New York.

The Commerce Department said on Tuesday the trade gap widened 8.6 percent to $48.7 billion, the highest level since January. The politically sensitive U.S.-China trade deficit increased 1.7 percent to $35.2 billion and the deficit with Mexico surged 15.9 percent to $6.6 billion.

Economists polled by Reuters had forecast the overall trade deficit rising to $47.5 billion in October. U.S. financial markets were little moved by the large trade shortfall, which was flagged in an advance report last week.

Republican President Donald Trump has blamed the trade deficit for the massive loss of U.S. manufacturing jobs as well as moderate economic growth. Trump has ordered the renegotiation of the North American Free Trade Agreement (NAFTA), which was signed in 1994 by the United States, Canada and Mexico.

He told a group of pro-NAFTA Republican senators during lunch on Tuesday that the United States had trade deficits with “everybody.”

“And that’s going to be changing – it’s already changing – but it’s going to be changing fast,” Trump said, adding that NAFTA negotiations were “going to be very successful.”

NAFTA talks have stalled, with Mexico and Canada rejecting a U.S. proposal to raise the minimum threshold for autos to 85 percent North American content from 62.5 percent as well as to require half of vehicle content to be from the United States.

TRADE DRAG

When adjusted for inflation, the trade deficit increased to $65.3 billion, also the largest since January, from $62.2 billion in September. The so-called real trade deficit in October was above the third-quarter average of $62.0 billion, suggesting that trade could subtract from gross domestic product in the October-December quarter.

The government reported last month that trade contributed 0.43 percentage point to the economy’s 3.3 percent annualized growth pace in the third quarter. The Trump administration believes a smaller trade deficit, together with deeper tax cuts could boost annual GDP growth to 3 percent on a sustained basis.

Republicans in the U.S. Congress have approved a broad package of tax cuts, including slashing the corporate income tax rate to 20 percent from 35 percent. But the planned fiscal stimulus will come at a time when the economy is at full employment, which will boost imports and widen the trade gap.

“While U.S. domestic demand will strengthen, foreign producers will supply an increased share,” said Mickey Levy, chief economist Americas and Asia at Berenberg Capital Markets in New York. “We project the U.S. trade and current account deficits will widen.”

Imports of goods and services increased 1.6 percent to a record $244.6 billion in October. Goods imports were the highest since May 2014 amid a $1.5 billion increase in crude oil imports. Imported oil prices averaged $47.26 per barrel in October, the highest since August 2015.

The country’s import bill was also boosted by food imports, which were the highest on record. There were also increases in imports of cellphones and other goods. Imports from China and Mexico were the highest on record in October.

Exports of goods and services were unchanged at $195.9 billion in October as a surge in shipments of industrial supplies and petroleum was offset by sharp declines in and civilian aircraft exports.

Exports to China hit their highest level since December 2013, while those to Mexico were the highest in three years.

A separate report on Tuesday showed activity in the services sector slowed in November amid a sharp moderation in both new and export orders.

The Institute for Supply Management (ISM) said its non-manufacturing index fell to a reading of 57.4 last month from 60.1 in October. A reading above 50 in the ISM index indicates an expansion in the services sector, which accounts for more than two-thirds of the U.S. economy.

Last month, a gauge of new orders received by services industries dropped to 58.7 from a reading of 62.8 in October. A measure of new export orders fell 3.0 points while imports rose 0.5 point.

(Reporting By Lucia Mutikani; additional reporting by Roberta Rampton; Editing by Andrea Ricci)