Is Mexico Prepared to Face Trade Threats from Trump?
At the end of November, President-elect Donald Trump shook up the international trade arena by threatening to impose a 25% tariff on Mexico and Canada, putting a regional trade agreement in a critical position unless both countries stepped up their efforts to curb migration and drug trafficking into the United States. This was a significant challenge for Claudia Sheinbaum, the first woman to assume the presidency in Mexico, who took office just eight weeks earlier. Many analysts thought that the scientist might be too rigid and cautious to deal with the unpredictable U.S. leader, unlike her predecessor, Andrés Manuel López Obrador.
As Trump prepares to take office, Sheinbaum has had a few public disagreements with him. However, she has begun to demonstrate tangible results that could prove Mexico is committed to cooperating on issues of migration, security, and relations with China. It’s hard to tell if this will be enough or if the tariff threats from Trump’s first day are truly viable, but experts and former diplomats point out that the new president has made a solid start. "It’s a pretty pragmatic and proactive approach from Sheinbaum and her team," commented Gema Kloppe-Santamaría, a researcher at the Wilson Center's Mexico Institute. Trump has repeatedly stated that the Mexican government has not done enough to control the influx of migrants and drugs into its territory and has threatened drastic tariff measures to pressure Mexico. He has also criticized the proliferation of Chinese factories in the country.
Since taking office, Sheinbaum has intensified her historical efforts to contain migrants heading toward the U.S. border, managing to halt an unprecedented 475,000 between October and December. Additionally, she has expressed her willingness to accept non-nationals deported from the United States. Her administration has also seized a record amount of over a ton of illegal fentanyl, imposed new tariffs on Asian products, and confiscated counterfeit Chinese goods in several cities. "She is sending a clear message that she is a strong political leader," said Kloppe-Santamaría, emphasizing that recent polls indicate that Sheinbaum’s popularity has surged to an impressive 80% after her first 100 days in office. "Trump certainly has a lot of power and legitimacy, but so does she," Kloppe-Santamaría added.
Reuters spoke with seven economic analysts, former diplomats, and academics on Mexican politics, and most expressed optimism about Sheinbaum’s strategy to engage with Trump. "This commitment from Mexico to align its interests with those of the U.S. builds confidence that President Sheinbaum and President-elect Trump can navigate the initial threats and uncertainties," pointed out Rodolfo Ramos of Bradesco BBI. While Trump is known for his unpredictability, Sheinbaum also maintains an element of surprise, according to Jorge Guajardo, former Mexican ambassador to China. Although she has hinted that Mexico could respond with tariffs, she has not provided specifics. "She has been very clever and strategic," Guajardo added. "She wants to save her tricks for the right moment." However, Arturo Sarukhán, former Mexican ambassador to the United States, warned that Sheinbaum’s government might be misreading the situation. "I think this could be a significant miscalculation," he noted. "There’s a sense that this is something of a performance by Trump, used to gain concessions and show his base he's delivering on his promises, even if he ultimately doesn't follow through on what he says," he said.
Experts agree that Mexico has a lot to lose if Trump wins a second term. The United States is undoubtedly Mexico's largest trading partner, and the Republican leader's threats of tariffs could significantly impact the Mexican economy. Trump has also promised mass deportations that could affect the Mexican labor market and create humanitarian issues in a country already battered by violence and slow economic growth. Additionally, Trump’s repeated threats of unilateral military action in Mexico are, in essence, acts of war, Sarukhán warned. In his view, relations between the two countries could become more unstable than in previous decades, so Mexico City must prepare for a much more aggressive Trump in his second term. Nevertheless, it seems that Sheinbaum has a clear strategy in mind. The actions she has taken may be enough at this moment to mitigate the pressure posed by Trump. "I think these measures are appropriate for laying the groundwork in negotiations and preventing Trump from starting with tariffs on day one," said Matías Gómez, an analyst at Eurasia Group. "However, this threat will function as a Sword of Damocles over Mexico throughout 2025, allowing Trump to pressure Sheinbaum on various fronts," he added.
In summary, the relationship between Mexico and the United States is crucial and filled with uncertainties, especially with the shifting policies of the U.S. administration. Sheinbaum's ability to adapt to this volatile environment will be vital to safeguard Mexico’s economic interests. Smart and proactive negotiations could be the key to minimizing risks and finding growth opportunities in the midst of adversity.
