A Spanish financial institution has calculated that a November election win by U.S. presidential candidate Donald Trump would cost Mexico a 3.4% decline in Gross Domestic Product (GDP).

A Trump win, says Gabriela Siller, director of economic analysis at Banco Base, represents a high risk for Mexico.

The outspoken candidate, who has alarmed Mexico with his protectionist platform, has threatened to pull the U.S. out of the North American Free Trade Agreement, impose a 35% tariff on Mexican imports and curb cash remittances to Mexico by Mexicans working in the U.S.

Using an econometric model, Banco Base estimates that the 35% tariff would result in an 11.6% decline in non-petroleum exports which would translate into 2.9% fall in GDP. Halting remittance payments would mean a 0.5% hit to GDP.

The exchange rate, now hovering around 19 pesos to the dollar, would reach 25.

On the other hand, should Democratic candidate Hillary Clinton win the election, the exchange rate was forecast to go the other way, dropping to around 17.5 pesos against the U.S. dollar.

Any further strengthening of the peso is seen by Siller as unlikely due to weak fundamentals in the Mexican economy.

Source: Expansión (sp)