Does Trump’s Wall Have a Silver Lining?

As the president slams Mexico, opportunities open up for investors—and for Mexico itself.

President Trump is on a mission to squeeze Mexico. He has threatened to renegotiate NAFTA and slap a 20 percent tariff on Mexican imports. He has browbeaten American companies into scrapping plans for new Mexican plants.

Not to mention his fondness for that great big wall.

Predictably, all of Trump’s Mexico bashing has put a serious dent in investment there. “We did a formal survey of Mexican private equity fund managers and we found that 80 percent of deals in the pipeline are delayed or postponed because of the Trump effect,” said Sebastian Miralles, managing partner of Tempest Capital, a private equity investment adviser that focuses on Mexico and Latin America. “These are deals that were at some stage of due diligence or negotiation and they were put on pause.”

And yet, there is upside south of the border—not only for investors but for Mexico itself. For years, Mexico has relied on its export industries to achieve growth and failed to fully address significant problems such as rampant corruption and a shortage of professional management.

“Now, in the age of Trump, the pressure is on Mexico to do a better job developing our internal markets,” Miralles said. “Our service sector has to grow, our healthcare industry has to grow, our finance industry has to grow. All of these industries have to grow to pick up the slack left by manufacturing and export industries.”

Mexico must also realign. It must cultivate exports to countries other than the U.S. It must improve its tax collection, which would strengthen the ability of companies to seek credit and in turn increase productivity.

“Even with all the bad stuff associated with Trump, my hope is it can have positive outcomes in terms of a more professionalized business environment in Mexico, as well as the broadening and diversifying of our internal and external markets,” Miralles said.

The Trump dump on Mexico also has upside for investors. It’s a great time to hunt for bargains. Export industries have been hit hard across the board, but not all products will be impacted the same by Trump’s policies. “Not all companies are exporting to the U.S. in equal proportions, but everybody is being affected equally,” Miralles Said. “So if you are smart and do your homework, you can find good manufacturing and export deals at very attractive prices right now.”

Other market sectors also show promise, Miralles said. Agricultural companies that target Asian markets are particularly compelling. And tourism is inviting, given where the peso trades now.

“We’re in a period of disruption with a lot of noise—but, in the end, Mexico comes out of this stronger,” Miralles said. “Mexico was in a comfort zone and Trump has forced Mexico out of its comfort zone, and forced the country to come face to face with reforms that have always been needed but avoided. I’m a big believer that volatility and challenge set the stage for growth.”