Threats of tariffs on Mexican goods stresses relationship with key U.S. trade partner
Threats of tariffs on Mexican goods stresses relationship with key U.S. trade partner
This piece was produced by our colleagues at the BBC.
In what was a crucial election year on both sides of the border, voters in Mexico and the United States alike were presented with the opportunity to elect their country’s first female president. Only the voters in Mexico took it.
Former Mayor of Mexico City Claudia Sheinbaum was elected as the new president, and the road ahead for the neighbors is already looking bumpy.
Barely three weeks after he won, Donald Trump threatened 25% tariffs on Mexican exports unless more is done to stop unauthorized immigrants and illegal drugs, particularly the synthetic opioid fentanyl, from entering the U.S. In response, Sheinbaum read out a letter she’d written to Trump:
“It’s not with threats or tariffs that you can deal with the issue of immigration,” she told him. “We have to cooperate and have mutual understanding to deal with these great challenges.”
Sheinbaum also warned that any tariffs on Mexican goods would be matched by the same restrictions on U.S. products.
“Probably the 25% tariff is just not going to happen, because the disastrous effects that such a tariff would have would be just too much to handle,” said Juan Carlos Baker, former undersecretary of foreign trade in Mexico and part of the Mexican negotiating team for the free trade agreement with the U.S. and Canada called USMCA.
“But that doesn’t mean that [Trump] will just lie down,” he added. “During his first administration, he did impose tariffs on Mexico; Mexico retaliated in kind. We lived for about a year with tariffs imposed between the two countries until a settlement was reached.”
Mexico is now the biggest trading partner of the U.S., after knocking China from that position. Mexico sends almost $500 billion worth of exports to the U.S. each year and recently has benefited from what’s known as nearshoring — U.S. and Chinese companies relocating to northern Mexican cities. For Chinese-owned companies, it cuts transport costs and is a way around U.S. sanctions on Chinese goods. Clearly, tariffs would harm those firms.
Amid it all, Mexico’s endless drug war rages on, particularly in the violent state of Sinaloa, where rival factions of the Sinaloa cartel are engaged in bitter street fighting. Some in Trump’s inner circle have even proposed U.S. drone strikes on Mexican soil against cartel leaders. Mexico has been quick to warn against such a plan.
But just days after the spat over tariffs, the Sheinbaum government announced what it called its biggest seizure of fentanyl in Sinaloa — more than a ton of the drug worth some $400 million. For Trump’s supporters, that suggests his pressure on Mexico paid off.
After a violent and punishing year of elections, many in Mexico expect four bruising years ahead in which this key North American relationship returns to more hostile.
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