MEXICO CITY — President Andres Manuel Lopez Obrador launched an ambitious plan Saturday to stimulate economic activity on the Mexican side of the U.S.-Mexico border, reinforcing his country’s commitment to manufacturing and trade despite recent U.S. threats to close the border entirely.

Mexico will slash income and corporate taxes to 20 percent from 30 percent for 43 municipalities in six states just south of the U.S. border, while halving to 8 percent the value-added tax in the region. Business leaders and union representatives have also agreed to double the minimum wage along the border, to 176.2 pesos a day, the equivalent of $9.07 at current exchange rates.

Lopez Obrador, who took office on Dec. 1, said the idea is to stoke wage and job growth via fiscal incentives and productivity gains. President Trump has repeatedly complained that low wages in Mexico lure jobs from the U.S. Mexico committed to boost wages during last year’s negotiations to retool its free trade agreement with the U.S. and Canada.

Speaking from Ciudad Juarez, a manufacturing hub south of El Paso, Texas, Lopez Obrador said Saturday he agrees with Trump that Mexican wages “should improve.” He decried that Mexican auto workers earn a fraction of what their U.S. counterparts take home, topping out at just $3 an hour versus a typical wage of $23 an hour in the U.S.


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