U.S. Tariff Threat and Mexico’s Response

By Laura Gottesdiener and Diego Oré

MEXICO CITY (Reuters) – In late November, U.S. President-elect Donald Trump caused a stir in global trade by threatening to impose 25% tariffs on Mexico and Canada. This move aimed to pressure both countries into increasing efforts to control migration and drug trafficking, effectively undermining a regional trade agreement.

This situation presented a significant challenge for Mexico’s newly elected President Claudia Sheinbaum, the first woman to hold the country’s presidency, who had only been in office for about eight weeks. Analysts were unsure if Sheinbaum, a scientist-turned-politician, possessed the necessary agility to deal with Trump’s unpredictable style, especially in comparison to her predecessor Andres Manuel Lopez Obrador.

As Trump readied to take office, Sheinbaum maintained public disputes with him while demonstrating commitment to collaboration concerning migration issues, security, and relations with China. Experts appreciate her proactive approach, noting her strong strategic positioning. Gema Kloppe-Santamaria from the Wilson Center underscored Sheinbaum’s pragmatic efforts, which have included significant actions against human trafficking and drug-related crimes.

Since taking office, Sheinbaum has intensified efforts against migrant movements toward the U.S. border, detaining an unprecedented 475,000 individuals between October and December. Her administration has also seized record quantities of illicit fentanyl and imposed new tariffs on certain Asian goods.

Kloppe-Santamaria highlighted that Sheinbaum’s leadership has resonated positively, with her approval rating reaching 80% after her initial 100 days in office. While Trump is expected to wield considerable influence, Sheinbaum has also established herself as a formidable political figure.

Conversely, Mexico’s economy is at risk if Trump follows through with tariffs, as the U.S. is its largest trading partner. Trump’s proposals could create significant strain on the Mexican job market and foster both humanitarian and security issues in a nation already facing corruption and economic challenges.

Former ambassador Arturo Sarukhan acknowledged the volatile nature of U.S.-Mexico relations under Trump. Nevertheless, Sheinbaum’s government seems prepared with strategies that could mitigate immediate threats, potentially protecting them from the imposition of tariffs as negotiations unfold. Analysts suggest that her current measures might provide a foundational negotiation pedestal, but the ongoing threat from Trump’s administration could remain a latent issue throughout his term.