Mexico threatens to retaliate against former President Trump’s proposal for new tariffs on its goods, escalating trade tensions between the two countries.
President Claudia Sheinbaum has stated that Mexico is prepared to respond if U.S. President-elect Donald Trump follows through on his threat to impose 25% tariffs on Mexican goods unless the country takes action to reduce drug trafficking and migration.
Sheinbaum, who assumed office in October, contended that the penalties would not halt the flow of migrants or drugs heading to the US and would merely lead to inflation and unemployment in both nations. Instead, she advocated for collaboration in addressing these issues.
Sheinbaum wrote in a letter to Trump on Tuesday, “Each tariff will be met with a countermeasure, continuing until our shared businesses are at risk.”
The warning follows Trump’s announcement on Monday that he intends to impose broad tariffs on imports from Canada, Mexico, and China once he assumes office in January. This move is part of his strategy to address illegal immigration and the US fentanyl crisis.
Trump threatened to impose a “25% tariff on all goods” imported from Mexico and Canada, stating this would remain in effect “until such time as drugs, particularly fentanyl, and illegal immigration stop invading our country.” Additionally, he warned of an extra 10% tariff on Chinese imports beyond the current duties.
READ MORE: Trump Vows to Impose Day-One Tariffs on Mexico, Canada, and China
Sheinbaum observed that Mexico is dealing with an influx of weapons smuggled from the United States and highlighted that American demand drives the flow of drugs across the border. She described it as a “problem of public health and consumption in your country’s society.”
During the 2024 American presidential election campaign, the US fentanyl epidemic and rising illegal immigration were widely discussed issues. In response to growing concerns over opioid production, China prohibited the manufacturing of synthetic opioids in 2019. Consequently, Mexican drug cartels have adapted by purchasing less regulated precursor chemicals for fentanyl from Chinese companies and producing it within Mexico. From there, it is transported into the United States, according to a statement made last month by the Drug Enforcement Administration (DEA).
According to the latest data from the US Census, Mexico, China, and Canada are the leading exporters to the United States. As of September, Mexico stands as America’s largest trading partner, accounting for 15.8% of total trade with Canada following in second place at 13.9%.
According to analysts, if the tariffs are implemented, prices—especially in the United States—would soar because American companies importing goods from Mexico would need to increase their prices.
“What is the point?” Sheinbaum questioned, emphasizing that increased cross-border tariffs would significantly impact American automakers with manufacturing facilities in Mexico, like General Motors and Ford.
However, economists suggest that it is uncertain whether Trump would follow through on his threat, considering the United States shares a free trade agreement with Mexico and Canada that prohibits imposing tariffs on the member countries.
