Walled off: as the U.S. moves forward with plans to build a wall along its southern border, Mexico is pushing back.

• Author: Frank, Mary Kate
• Position: Cover story

There's an old saying that good fences make good neighbors. But is that the case when it comes to the United States and Mexico?

In January, President Donald Trump acted on a key campaign promise and issued an executive order calling for the "immediate construction" of a wall along the U.S.-Mexico border (see map). Trump says the wall will stop people from entering the U.S. illegally--and his promise to make Mexico pay for it was cheered by his supporters during the election.

After Trump posted a video on Twitter announcing the executive order, Mexican President Enrique Pena Nieto tweeted a video of his own. "Mexico will not pay for any wall," he said.

Trump fired back, tweeting that perhaps the two men should cancel their upcoming meeting at the White House. Pena Nieto agreed, pulling out of the sit-down.

The testy back-and-forth came after months of tension between the U.S. and its southern neighbor. Trump has repeatedly characterized Mexico as a source of undocumented immigrants, drugs, and unfair trade practices that hurt the U.S. economy. He says he'll deal with these issues by walling off the country, increasing deportations, and overhauling trade agreements.

Trump's proposals--and his harsh words--have angered many Mexicans. They see Trump as a bully and are pressuring Pena Nieto to stand up to him.

Both the U.S. and Mexico have much to lose if their relationship turns hostile. The two countries are important economic partners, conducting more than $580 billion in trade every year. They cooperate on border security and other issues. Now those deep ties are threatened.

"Severing the U.S.-Mexico relationship would be devastating to both the U.S. and Mexico, to both our economies because of the number of jobs that depend on that relationship," says Christopher Wilson, a Mexico expert at the Wilson Center, an independent think tank in Washington, D.C. In the U.S., he adds, about 5 million jobs depend on trade with Mexico.

A Dramatic Transformation

Mexico and the U.S. share a long, turbulent history (see timeline, p. 8). In the past three decades, however, the relationship has improved greatly, and Mexico has dramatically transformed.

Since the 1994 adoption of the North American Free Trade Agreement (NAFTA)--which opened up trade among the U.S., Mexico, and Canada-Mexico's exports have soared. In addition to growing much of the produce Americans eat, Mexico now makes and sells cars, electronics, and appliances.

As the Mexican economy has grown, life has improved for many of its 128 million citizens. Almost half of Mexico's households are now considered middle class. Kids, on average, stay in school twice as long as they did 25 years ago, says Shannon K. O'Neil of the Council on Foreign Relations.

"Today, your average 15-year-old in Mexico is thinking about the quiz he's going to take on Friday, not about migrating to the U.S. to look for work," she says.

Mexico's economic gains mean that fewer of its people are heading to the U.S. illegally in search of jobs. The number of undocumented Mexicans in the U.S. dropped from a high of 6.9 million in 2007 to 5.8 million in 2014, according to the Pew Research Center. At the moment, experts say net migration is zero: As many Mexicans are heading back to Mexico as are heading illegally into the U.S.

Despite positive changes, Mexico faces serious challenges in the form of poverty, violence, and the illegal drug trade. And Mexicans still represent about half of the 11 million undocumented immigrants living in the U.S.

Because of these issues, many Americans support Trump's plans to seal off the border. They say undocumented immigrants are taking American jobs and resources, and they blame them for increasing crime rates.

Trump has implied that many undocumented immigrants are criminals--calling them "bad hombres. " In February, the Trump administration announced plans to enforce immigration laws much more aggressively and to step up deportations.

As far as paying for the wall, Speaker of the House Paul Ryan says Congress will fund the project, which could cost more than $21 billion and take until the end of 2020 to complete. But Trump has mentioned a tax on Mexican imports as one possible way to make Mexico foot that bill.

"[Trump] has a promise he made to the American people, which is to secure our border," Ryan said recently. "A wall is a big part of that."

But if the U.S. builds the wall, it may face new threats at the southern border. Mexico currently collaborates with the U.S. on counterterrorism efforts, sharing information on potential terrorism suspects. Jorge Castaneda, Mexico's former foreign secretary, says that assistance could end if Trump carries out his plans. "Let's see if his wall keeps the terrorists out," Castaneda said. "Because we won't."

Outrage in Mexico

In Mexico's view, the best way for the U.S. to combat illegal immigration is to support the Mexican economy. Its reasoning: Good opportunities at home mean Mexicans won't need to go to the U.S. to find work.

That's one reason pulling the U.S. out of the NAFTA trade deal, as Trump has suggested, could backfire. He says NAFTA created unfair incentives for U.S. companies to move jobs to Mexico. His calls during the election to renegotiate...