MEXICO CITY — Mexican President Claudia Sheinbaum indicated on Tuesday that Mexico might retaliate with its own tariffs after President-elect Donald Trump threatened to impose 25% import tariffs on Mexican goods unless Mexico halts the flow of drugs and migrants across the border.
Sheinbaum expressed willingness to discuss these issues but asserted that the drug problem is primarily a U.S. issue.
“Retaliatory tariffs would lead to further escalation, jeopardizing shared businesses,” Sheinbaum warned, citing U.S. automakers with plants in both countries.
She stated that Mexico has made significant strides in curbing migrant flow, noting the absence of large migrant caravans at the border. However, she acknowledged a decline in Mexico’s efforts to combat drugs like fentanyl, produced by Mexican cartels using chemicals imported from China.
Sheinbaum highlighted the influx of U.S. weapons into Mexico and framed the drug flow as a U.S. public health and consumption problem.
She criticized U.S. military spending, suggesting that redirecting funds towards regional development would address the root causes of migration. “Investing a portion of U.S. military spending in peace and development would tackle the underlying causes of migration,” she proposed.
Sheinbaum’s firm response indicates a stark contrast with the relationship between Trump and the previous Mexican president.
In late 2018, former President Andrés Manuel López Obrador, known for his amiable political style, cultivated a close relationship with Trump. They reached an agreement where Mexico assisted in preventing migrants from reaching the border, and in return, Trump withdrew his tariff threats.
In contrast, Sheinbaum, who assumed office on October 1st, is a more assertive leftist leader with a history in radical student activism and seems less inclined to appease Trump.
“We negotiate as equals; there’s no subservience, as we are a great nation,” Sheinbaum declared, while also expressing optimism for reaching an agreement.
Gabriela Siller, director of economic analysis at Banco Base, however, fears the contrasting personalities could lead to a dangerous standoff, noting Trump’s aversion to defeat.
“Trump might have issued the threat casually, but Mexico’s counter-threat of retaliatory tariffs could prompt Trump to actually impose them,” Siller commented.
The seriousness of Trump’s threat remains unclear. The USMCA (United States-Mexico-Canada Agreement) prohibits unilateral tariff imposition among member countries. The economic impact of sudden tariffs is also uncertain, considering the interdependence of auto plants on both sides of the border, which could halt production.
“This is unacceptable and would cause inflation and job losses in both Mexico and the United States,” Sheinbaum stated, while reiterating her willingness to engage in discussions. She specifically cited General Motors as an example of a company that would be negatively affected.
“Dialogue is the best path to achieve understanding, peace, and prosperity for both our countries,” Sheinbaum concluded. “I hope our teams can meet soon.”
Late Monday, Trump announced he would impose a 25% tax on all goods from Canada and Mexico, and an additional 10% tariff on goods from China, as one of his initial executive orders.
These tariffs, if implemented, would increase prices for American consumers on various products, from fuel to automobiles and agricultural goods. The U.S. is the world’s largest importer, with Mexico, China, and Canada being its top three suppliers.
Trump made these threats in posts on Truth Social, criticizing the influx of illegal immigrants, despite border apprehensions being near four-year lows.
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” he wrote.
He stated that these tariffs would remain until “Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
“Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power,” he continued, “and until such time that they do, it is time for them to pay a very big price!”
