It's Difficult to Maintain Joint Tariffs Against Mexico and China; Ebrard Claims We Have the Upper Hand

In the United States, there is a political agreement indicating that the way forward is through protectionism in trade. The elected president Donald Trump has hinted at the possibility of imposing tariffs on several countries, including Mexico, and increasing those imposed on China. According to the Secretary of Economy, Marcelo Ebrard, this simultaneous protectionist approach is not feasible, and they are aware of this in Washington.

"You can't have low inflation and continuous growth in the United States while simultaneously applying strong protectionism towards Mexico and China. They aren't compatible," Ebrard commented during his appearance at the Economic Outlook Seminar at ITAM. He mentioned that there is optimism about reaching a favorable agreement regarding the review of the USMCA, thanks to favorable trends in security and migration issues. Starting on the 20th of this month, Mexico will begin dialogue with Trump on these matters. The official stressed that without the USMCA, many American companies wouldn't be able to sustain themselves, especially the automotive sector, which faces stiff competition from China. Ebrard presented some data reflecting the success of the treaty: the United States and Canada operate over 15,000 manufacturing plants in Mexico. Additionally, the treaty accounts for 30% of global GDP and moves $3.1 million per minute. Regarding security, he emphasized that Mexico is making progress in seizing weapons and fentanyl, expressing confidence in reaching an agreement in this area. Ebrard indicated that a U.S. report suggests that the neighboring country is the source of weapons for Mexican drug cartels; for example, the Sinaloa cartel, which raises significant concern, receives 85% of its weapons from the U.S. He highlighted that Mexico's main request to the U.S. is for help in controlling the flow of weapons. From 2018 to date, only 3,603 weapons have been seized at the U.S. border crossing into Mexico over six years. In contrast, just in this administration, from October 1 to January 1, 3,602 weapons have been seized entering Mexico. "So Mexico will seek to propose a balanced effort to combat this trend, and I believe it's likely that we will reach an understanding on this issue." Other factors that help Mexico feel confident in negotiations with Trump include a 75% reduction in migration flows since December 2023 and a 20% decline in fentanyl-related deaths in the United States. These will be the arguments Mexico presents to Trump.

In conclusion, it is crucial for Mexico to strengthen its position before the United States and advance cooperation on issues like trade and security. The dynamics of the USMCA are fundamental for the economic stability of both countries, and it is vital for Mexico to continue promoting a collaborative approach that benefits its interests while remaining cautious of potential protectionist measures that may arise.