Mexican President To Trump: Let's Jointly Tackle Border Issues Though We Will Counter Tariffs

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Zinger Key Points
  • Mexican President Sheinbaum will implement plan B and tariff and non-tariff measures, but calls for dialogue with the US, not confrontation.
  • Who will suffer most? 'Mexico faces a condition of extreme weakness, since the economy did not close well last year,' says Mexican expert..
  • Get the Real Story Behind Every Major Earnings Report

Following President Donald Trump's Saturday executive order imposing steep tariffs on imports from Mexico, Canada and China, Mexican President Claudia Sheinbaum swiftly implemented reciprocal measures.

Sheinbaum instructed Economy Secretary Marcelo Ebrard to activate Mexico's contingency strategy. "To implement Plan B that we have been working on, which includes tariff and non-tariff measures in defense of the interests of our country," she said, according to Spanish language Informador.Mx.

Mexico Calls For Dialogue, Rejects Confrontation

Despite the retaliatory action, Sheinbaum said Mexico was not seeking conflict with the U.S. "Mexico wants shared collaboration between neighboring countries," she said, urging Trump to establish a dialogue to formulate a cooperative strategy. The goal, Sheinbaum said, is to jointly tackle organized crime and fentanyl trafficking, issues central to Trump's rationale for the tariff increase on Mexico.

"It is not with the imposition of tariffs that problems are solved, but by talk and dialogue as we did in recent weeks with your State Department," Sheinbaum said directly to Trump. She noted that Trump's own data on reduced migration stemmed from figures provided by the Mexican government.

Who Will Suffer Most?

Mexico relies heavily on trade with the U.S., with over 80% of its exports – cars, machinery, produce and medical equipment – heading north, making up 15% of total U.S. imports, noted the Council on Foreign Relations. This dependence is strongest in several northern industrial states, which account for nearly half of Mexico's U.S.-bound exports, valued at over $200 billion annually.

The tariffs could shrink Mexico's GDP by 16%, hitting the auto industry hardest, as 80% of Mexico's 2.5 million car exports go to the U.S. The energy sector would also suffer, with the U.S. receiving 60% of Mexico's crude oil exports while supplying over 70% of Mexico's refined fuel. Tariffs could drive up fuel costs, straining Mexico's economy.

In terms of the auto industry, the U.S. imports more from Mexico and Canada than any other sector, according to the Wall Street Journal. That would be about $147 billion in passenger vehicles and auto parts from Mexico in 2023 and nearly $60 billion from Canada. 

Ford Motor Company F and General Motors Company GM, for starters, both have manufacturing operations in Mexico that produce vehicles and components for the U.S. market and rely on Mexican facilities for assembling various car models and parts.

So, to answer the question of who will suffer most: "Mexico faces a condition of extreme weakness, since the economy did not close well last year," said Miguel Landeros, president of the Mexican Council of Foreign Trade, per the Mexican newspaper.

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Photo: Shutterstock

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