Mexico is gearing up for a trade battle after former President Trump announced new tariffs on Mexican imports. Starting March 5, 2025, a 25% tariff will be applied to a wide range of goods coming from Mexico. This decision is part of a broader trade war that also targets Canada and China. Trump justified these tariffs by citing concerns over drug trafficking and illegal immigration. Following the announcement, U.S. markets dropped sharply, indicating uncertainty in the economy.
Mexican President Claudia Sheinbaum quickly condemned the tariffs as "inconceivable." She promised that Mexico would respond with retaliatory measures against U.S. goods. Sheinbaum plans to announce specific tariffs in Mexico City on Sunday. A phone call with Trump is scheduled for Thursday, where both leaders may discuss this escalating situation. Sheinbaum emphasized that Mexico has been cooperative on U.S. requests related to drug trafficking and border security.
Mexican President Claudia Sheinbaum condemned the tariffs and vowed retaliatory measures against U.S. goods, emphasizing cooperation on border security.
The economic impact on Mexico has already begun. The peso weakened against the U.S. dollar, and the main stock market fell over 1%. The automotive industry, a major part of Mexico's economy, is expected to face significant challenges. There are concerns about potential job losses in sectors that rely on exports. Analysts warn that companies operating in Mexico could incur billions in added costs due to the tariffs. U.S. farmers are expected to be particularly affected by retaliatory measures as they are perceived as Trump supporters. Additionally, the average U.S. tariff is projected to rise from 2.4% to 10.5%, which could further exacerbate the economic strain on both countries.
Diplomatic tensions are rising as Sheinbaum stressed the lack of justification for the U.S. decision. She highlighted the ongoing collaboration between the two nations on drug trafficking prevention and pointed out the shared responsibility for the opioid crisis in the United States. She also noted the potential damage to job creation in both countries.
Mexico's planned retaliation may include both tariff and non-tariff measures targeting U.S. agricultural products and restrictions on U.S. companies operating in Mexico. As the trade war escalates, the future remains uncertain, with analysts predicting prolonged economic uncertainty in the region.
