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Mexico’s economy minister Marcelo Ebrard said his country would consider retaliating with tariffs of its own should the incoming US administration impose taxes on Mexican imports.
In the last days of the campaign, President-elect Donald Trump vowed to impose tariffs of as much as 25% on Mexican imports should its southern neighbor fail to crack down on migration and the flow of drugs into the US.
Ebrard also mentioned how Trump in his previous term threatened the same tariffs on Mexico while also seeking concessions from Mexico to curb immigration from the country to the US.
“If you apply tariffs, we’ll have to apply tariffs. And what does that bring you? A gigantic cost for the North American economy,” he said.
SIGNALS
Trump risks alienating ally in trade war with China
Trump’s tariff threats do not take into account the countries’ bilateral economic dependence, wrote Americas Quarterly: Mexico sends up to 80% of its exports to the US. Decoupling trade with Mexico would make the fight against Washington’s even larger target, China, more difficult: US imports from China totaled $536.3 billion in 2022, undercutting prices of US products and encouraging foreign manufacturing. Trump has stated that he will also introduce trade tariffs on China of up to 60%. However, too many tariffs risk increasing domestic prices.“[Trump] continues to make China the bogeyman and has indicated he will get more aggressive,” one expert told CNBC, leaving Mexico as a key trade ally to mitigate against the worst economic impacts of Trump’s hard line on China.
Trump’s victory and its impact on Mexico
The results of the US elections last week put Mexico in “the firing line” of many of Trump’s hardline rhetoric: Border crossings, mass deportations of migrants, and military strikes will all be up for discussion in the coming months, The New York Times wrote. Already, Trump has chosen to appoint Tom Homan, the former head of Immigration and Customs Enforcement Agency during the first half of his last presidential term, as the new “border czar,” reported Mexican news site La Jornada, suggesting mass deportations of illegal migrants will be “among [Trump’s] top and immediate priorities.” How new Mexican President Claudia Sheinbaum navigates these policies will be “pivotal, potentially setting the tone for North American diplomacy for years to come,” The New York Times wrote.