Trump’s New Tariffs: A Major Blow to the Mexican Economy and Beyond

The return of Donald Trump to the global political scene has rekindled the trade tensions that characterized his administration from 2017 to 2021. His announcement of a new series of tariffs targeting various countries and sectors indicates that the scale of his proposals far exceeds the policies implemented during his first term. The American think tank Tax Foundation estimates that this tariff offensive will affect imports by more than $1.5 trillion, which is 3.7 times greater than the $380 billion impact experienced due to the tariffs from 2018 to 2019.

Mexico Faces the Challenge

This forecast does not include the tariffs Trump plans to announce on April 2, which could drive the costs of the trade confrontation to unprecedented levels. On February 13, Trump signed a presidential memorandum aimed at implementing a plan that raises U.S. tariffs in response to various fiscal policies, existing tariffs, currency manipulation, or unfair practices by other nations. The wording is clear: it aims to penalize any country that poses a risk to industry or employment in the U.S. Experts in international trade warn that this plan potentially encompasses almost all of America's trading partners. According to official data, the country imported goods valued at $3.3 trillion in 2024. Tax Foundation's projection suggests that about 43% of this flow would be subject to new tariffs if Trump fully carries out his proposal. The European Union, China, Mexico, and Canada would be the most affected. Trump has already set a 10% tariff on Chinese products as of February 4, and increased another 10% on March 4. For Mexico, Canada, and the European Union, a general 25% tariff is on the table, targeting sensitive sectors such as steel, aluminum, copper, lumber, automobiles, agricultural products, and pharmaceuticals. Some of these tariffs are already in effect, including the 25% on steel and aluminum, in addition to certain products from Mexico and Canada that do not meet USMCA standards, impacting nearly half of Mexico's exports to the U.S. Economy Secretary Marcelo Ebrard has acknowledged the seriousness of the situation and calls for strategic preparation. During a meeting with business leaders, he emphasized the need to coordinate efforts between the government and the private sector. "We need to understand and adapt to this new scenario. I have to deal with the trade aspect and, to some extent, the financial one," he expressed. Ebrard hesitates to predict what will happen on April 2 when Trump unveils the rest of his strategies, as information from Washington changes frequently. "Last week we had one version; the Treasury Secretary already gave another. It all indicates that each country will receive a different letter, like in an exam," he assured. Trump’s proposal suggests a differentiated approach, where fiscal aspects, domestic subsidies, or exchange rate policies can influence tariff levels. This strategy will create a system of comparative disadvantages, where each nation faces barriers based on their own regulations. Ebrard maintains constant communication with his American counterparts, conducting meetings, calls, and visits to Washington as part of an active agenda. "The key is resilience, patience, and perseverance. Our aim is to secure the best conditions for Mexico, regardless of the new set of rules," he emphasized. For the moment, the Mexican government has managed to keep at least 50% of its exports unaffected by the 25% tariffs. President Claudia Sheinbaum achieved this margin after a call with U.S. authorities, a negotiation Ebrard called "crucial." However, the situation remains volatile. Trump recently commented in an interview with Fox News that the USMCA is a good deal, but he accused Canada and Mexico of "cheating."

In conclusion, Trump’s new approach to tariffs could have significant consequences for Mexico’s economy and its main trading partners. This is a critical moment for the country, where collaboration between the government and the private sector will be essential to mitigate the impact of these measures. Companies must prepare not only to adapt to new trade rules but also to diversify their markets and reduce dependence on a single trading partner, which can offer better long-term financial stability.