Mexico vows to retaliate if Trump imposes 25 percent tariffs
Mexico is the top U.S. trading partner, and Canada is not far behind.
President Claudia Sheinbaum also made clear that Mexico was prepared to respond with its own tariffs.
“President Trump, it isn’t with threats or tariffs that we resolve the migratory phenomenon or the abuse of drugs in the United States,” Sheinbaum said at her morning news conference, reading a letter she had written to the incoming U.S. leader. “What’s needed to confront these great challenges is cooperation and understanding.”
Trump said Monday night that he would impose the 25 percent tariff on Mexico and Canada on his first day in office to halt the “invasion” of drugs and migrants. He also vowed to introduce an additional 10 percent tariff on goods from China, the main source of precursor chemicals to make fentanyl.
Trump’s post on the Truth Social site stunned the United States’ closest trading partners. The three countries exchange $1.8 trillion in goods and services per year, making them one of most important commercial blocs in the world. On Tuesday, the U.S. dollar rose against the Mexican peso and Canadian dollar, but the American stock exchange remained steady.
Canadian Prime Minister Justin Trudeau said Tuesday that he had a phone conversation with Trump and talked about some of the challenges the countries could work through together. “We obviously talked about laying out the facts,” he told reporters. “Talking about how the intense and effective connections between our two countries flow back and forth. We talked about some of the challenges that we can work on together.”
Canadian analysts and former officials reacted with greater worry.
“We need to recognize that it’s not going to be business as usual,” Perrin Beatty, former head of the Canadian Chamber of Commerce, told the Canadian Broadcasting Corp. “We have a president who, instead of seeing this as being the special relationship between Canada and the United States, sees the relationship much more on a transactional basis.”
Mexico is the top U.S. trading partner, and Canada is not far behind. If Trump imposes the tariffs, he would be violating the free-trade agreement that has bound together the three countries for 30 years. China is also a major trade partner, with a bilateral exchange of about $600 billion.
U.S. imports from Mexico include cars, machinery and electrical equipment, as well as more than half of its fresh fruit, according to the Agriculture Department. Canada supplies oil, gas and machinery, while China provides electronics, toys, furniture and plastics. Economists warn that tariffs on these goods could raise grocery prices and disrupt supply chains, key concerns during the recent election.
Mexican and Canadian leaders have emphasized that not only would their countries be hurt by the tariffs — but U.S. businesses and consumers would, too. Sheinbaum noted that Mexico’s top exporters included U.S.-based automakers General Motors and Ford Motor Co.
“If there’s a tariff, another one will come in response,” she said. “And that will put at risk our common businesses.”
Mexico’s economy is heavily dependent on trade with the United States, sending its neighbor more than 80 percent of its exports.
Sheinbaum’s comments marked an abrupt shift from her conciliatory tone following Trump’s election victory this month. The leftist Mexican leader, who took office in October, has largely continued the policies of her predecessor, Andrés Manuel López Obrador, who became friendly with Trump. In 2019, when Trump threatened Mexico with tariffs unless migration was reduced, López Obrador gave in and deployed the military to the country’s borders.
But migration has surged again in recent years, as asylum seekers flee repression and poverty in countries reeling from the pandemic and failed economic policies.
During his campaign, Trump blasted President Joe Biden for soaring apprehensions at the U.S. border, which hit a record 249,785 in December last year. Since then, however, the numbers have dropped by around 75 percent, thanks to stricter U.S. policies and a stepped-up effort in Mexico to detain U.S.-bound migrants.
While the two countries have worked together closely on migration, the antidrug relationship has fractured. Mexico was furious about a secret operation in July in which one of the country’s legendary drug lords, Ismael “El Mayo” Zambada, was spirited out of the country by another Mexican trafficker and turned over to American authorities. Mexican officials only learned of the operation after Zambada was in U.S. custody. The U.S. ambassador to Mexico, Ken Salazar, said earlier this month that Mexico had “closed the door” to security cooperation.
The fallout from the Zambada episode underscored why Mexico has been hesitant to launch an aggressive assault on drug organizations. His capture provoked a split in the Sinaloa cartel. The two factions have been battling for months, leaving more than 400 people dead.
Sheinbaum blamed the United States for contributing to the narco violence that has seared the country for more than two decades. Around 70 percent of the weapons captured in Mexico are U.S.-made, she said.
Cecilia Farfán, a researcher on organized crime at UC San Diego, described Trump’s statement as reflecting an “old-school view of drugs” by suggesting fentanyl was a Mexican-made problem. The opioid is made of chemicals imported into the United States and Mexico. And while fentanyl is mostly assembled in Mexico, agents have found an increasing number of machines in the U.S. used to press it into pills. “You have what I’d call a fundamentally North American drug,” she said.
Eduardo Guerrero, a Mexican security analyst, said Sheinbaum “has a new security strategy, which is more solid than López Obrador’s,” centered on greater use of intelligence and better civilian-military cooperation. “If instead of fighting, we sat down to talk … there could be very good results in the first year of the Trump government,” he said.
Valentina Muñoz Castillo contributed to this report.
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