Mexico indicates that it can hit back with import duties on the US
The Mexican government signaled Monday that it planned to retaliate with its own trade restrictions if newly elected President Donald J. Trump follows through on his threats to impose sky-high tariffs on Mexican exports to the United States.
“If you impose 25 percent tariffs on me, I must respond with tariffs,” Marcelo Ebrard, Mexico’s economy minister, said. told a radio interviewer on Monday. “Structurally, we have the conditions to play in Mexico’s favor,” he added.
The revelation by Mr. Ebrard, who is poised to become one of Mexico’s top negotiators with the Trump administration, highlights rising tensions between the countries in the wake of the U.S. presidential election.
During his campaign, Mr. Trump promised to immediately impose 25 percent tariffs on all goods from Mexico unless that country’s government stops the flow of migrants and drugs into the United States. If Mexico does not respond to Trump’s satisfaction, he said, he could increase such tariffs by up to 100 percent.
Such moves could send shockwaves through Mexico’s economy, which is exceptionally dependent on trade with the United States, which exports about 80 percent of its goods to its northern neighbor.
But a slew of industries in the United States, including farmers and semiconductor and chemical manufacturers, also depend on exports to Mexico, which last year overshadowed China will become the United States’ largest trading partner. Complex supply chains also intertwine the economies of both countries, especially in the automotive and agricultural industries.
Overall, U.S. exports to Mexico accounted for nearly 16 percent of total U.S. exports in 2022, according to the Office of the United States Trade Representative.
“A tariff war will not end well,” said Valeria Moy, chief executive of the Mexican Institute for Competitiveness, an economic research institute. “The United States is about to lose – and Mexico stands to lose even more.”
“The answer to tariffs is not more tariffs; it is to sit down and negotiate,” Ms Moy added.
That appears to be the strategy of Mexico’s new president, Claudia Sheinbaum, who has not repeated her minister’s claims. Instead, she has said her administration would like to meet with Trump’s transition team before he takes office.
“It is important to reach out, know what they are thinking and make as much progress as possible in coordination,” she told reporters on Monday. Ms. Sheinbaum and Mr. Trump had their first phone conversation last week, which the Mexican president described as “very cordial.”
The renewed tensions date back to the early days of the first Trump administration, which began imposing tariffs on imports from Canada, China, Mexico and the European Union. In 2018, shortly after Mr. Trump imposed tariffs of 25 percent on steel and 10 percent on aluminum, several countries taxed several other products from the United States. Mexico was one of them.
Enrique Peña Nieto, then president of Mexico, launched a two-pronged retaliation. He imposed 25 percent tariffs on imports of 51 steel products from the United States. He also imposed tariffs on several other imported goods: whiskey, pork, cheese, apples, cranberries, potatoes, and ham.
U.S. agricultural exports to Mexico were estimated at $2.6 billion affectedThis is evident from a report from the United States Department of Agriculture.
When Mr. Peña Nieto’s successor, Andrés Manuel López Obrador, took office in 2018, Mr. Trump again said he would apply escalating tariffs on all Mexican imports until the flow of “illegal immigrants entering our country through Mexico” stopped.
Although Mr. López Obrador promised a humanitarian approach to the country’s migration policy, which he delivered on during his first few months in office, Mexico eventually began militarize immigration enforcement under pressure from the United States – and at the expense of migrants rightsaccording to advocates and rights organizations.
Such moves by Mexico eased tensions with Mr. Trump, who in 2019 backed away from plans to impose tariffs on all goods from Mexico. Mr. López Obrador and Mr. Trump had a smooth relationship for the remainder of Mr. Trump’s first term, as Mexico increased enforcement of U.S. immigration restrictions and the United States largely refrained from interfering in Mexico’s internal affairs.
When reporters asked Mr Ebrard, the economy minister, spoke last week about how the government should respond to Mr Trump’s threats. He pointed to his own experiences at the time and said: “With cold blood and intelligence.”
