Mexican President Claudia Sheinbaum mentioned on Wednesday Mexico would retaliate if U.S. President-elect Donald Trump adopted by way of along with his proposed 25% across-the-board tariff, a transfer her authorities warned might kill 400,000 U.S. jobs and drive up costs for U.S. customers.
“If there are U.S. tariffs, Mexico would additionally increase tariffs,” Sheinbaum mentioned throughout a press convention, in her clearest assertion but that the nation was getting ready doable retaliatory commerce measures in opposition to its prime commerce accomplice.
Mexican Financial system Minister Marcelo Ebrard, talking alongside Sheinbaum, known as for extra regional cooperation and integration as an alternative of a conflict of retaliatory import taxes.
“It’s a shot within the foot,” Ebrard mentioned of Trump’s proposed tariffs, which seem to violate the USMCA commerce deal between Mexico, Canada and the U.S.
Ebrard warned the tariffs would result in large U.S. job losses, decrease development, and hit U.S. corporations producing in Mexico by successfully doubling the taxes they paid. “The impression on corporations is big,” he mentioned.
The proposed tariffs would hit the automotive sector’s prime cross-border exporters particularly arduous, Ebrard added, particularly Ford, Basic Motors, and Stellantis.
Ebrard famous that 88% of pickup vans bought within the U.S. are made in Mexico and would see a value enhance. These autos are well-liked in rural areas that overwhelmingly voted for Trump.
“We estimate that the typical value of those autos will enhance by $3,000,” Ebrard mentioned. Sheinbaum and Trump spoke by telephone in a while Wednesday, the Mexican president mentioned on social media platform X, including the 2 mentioned “strengthening collaboration on safety points” and that the dialog was “glorious.”
In a submit on his Reality Social platform, Trump mentioned Sheinbaum “agreed to cease migration by way of Mexico, and into the USA, successfully closing our Southern Border.” He described the dialog as “very productive”.
Sheinbaum’s workplace didn’t instantly reply to a request for remark from Reuters.
Trump has beforehand mentioned the tariffs would stay in impact till the circulation of medication – notably fentanyl – and migrants into the U.S. was managed.
Sheinbaum added migrant caravans are now not arriving on the U.S.-Mexico border “as a result of they’re attended to” in Mexico.
A caravan of a number of thousand migrants had been heading by way of southern Mexico however numbers have lately dwindled.
Many analysts regard Trump’s tariff threats as extra of a negotiating tactic than commerce coverage.
“The shortage of a transparent hyperlink between this risk and questions associated to commerce suggests the brand new president plans to make use of tariffs as a negotiating technique to attain objectives largely unrelated to commerce,” mentioned David Kohl, chief economist at Julius Baer.
PROFIT WIPED OUT
Mexico’s automotive business is the nation’s most necessary manufacturing sector, exporting predominantly to the USA. It represents practically 25% of all North American automobile manufacturing.
Analysts at Barclays mentioned they estimate the proposed tariffs “might wipe out successfully all income” from the Detroit Three automakers.
“Whereas it’s typically understood {that a} blanket 25% tariff on any autos or content material from Mexico or Canada could possibly be disruptive, traders under-appreciate how disruptive this could possibly be,” they wrote in a word on Tuesday.
Brian Hughes, a Trump transition workforce spokesperson, mentioned the tariffs would defend U.S. producers and employees from “unfair practices of international corporations and international markets.”
Hughes mentioned Trump would implement insurance policies to make life inexpensive and affluent for his nation.
GM and Stellantis declined to remark. Ford didn’t touch upon how the threatened tariffs would have an effect on its enterprise however mentioned it manufactures extra autos in the USA than most main automakers.
Mexico’s automotive business group AMIA mentioned it could put together for any risk and wait to see what formal actions are taken.
The Institute of Worldwide Finance, a commerce group for the worldwide monetary providers business, warned Mexico-U.S. relations can be difficult going ahead.
“The imposition of tariffs, finally resulting in elevated protectionism, and different insurance policies affecting alternate charges and commodity costs might have vital implications for the area,” it mentioned in a word.
The USMCA is up for evaluation in 2026.
Katia Goya, director of worldwide economics at Grupo Financiero Banorte, mentioned it was possible the three USMCA nations would search wholesale renegotiation of the pact moderately than simply rubber-stamp it to proceed in its present type.
“The impact of a trade-conflict state of affairs is that it’ll imply decrease financial development in the USA, greater unemployment, and better inflation,” Goya mentioned.
Ebrard mentioned USMCA commerce amounted to $1.78 trillion within the first 9 months of this yr. “We are able to fragment and divide with tariffs,” Ebrard mentioned. “Mexico doesn’t need conflicts and divisions, however to construct a stronger area.”
