In a strong response to U.S. President-elect Donald Trump's proposed 25 percent across-the-board tariff, Mexican President Claudia Sheinbaum has declared that Mexico would retaliate, warning that such a move could eliminate 400,000 U.S. jobs and drive up prices for American consumers.
During a press conference on Wednesday, Sheinbaum stated, \"If there are U.S. tariffs, Mexico would also raise tariffs,\" signaling Mexico's readiness to implement countermeasures against its top trade partner.
Mexican Economy Minister Marcelo Ebrard echoed these sentiments, advocating for greater regional cooperation and integration instead of a retaliatory trade war. \"It's a shot in the foot,\" Ebrard remarked, highlighting how Trump's tariffs seemingly violate the USMCA trade agreement between Mexico, Canada, and the U.S.
Ebrard warned that the proposed tariffs would result in massive job losses in the U.S., hinder economic growth, and significantly impact U.S. companies operating in Mexico by effectively doubling their tax burden. \"The impact on companies is huge,\" he added.
The automotive sector stands to be particularly affected, with major cross-border exporters like Ford, General Motors, and Stellantis facing significant challenges. Ebrard noted that 88 percent of pickup trucks sold in the U.S. are made in Mexico, and a tariff increase could raise their prices by an average of $3,000, particularly affecting rural areas that largely supported Trump.
Later on Wednesday, Sheinbaum and Trump spoke by phone, discussing \"strengthening collaboration on security issues\" and describing the conversation as \"excellent.\" Trump has indicated that the tariffs would remain until issues such as drug flow and migration into the U.S. are controlled. Sheinbaum also mentioned that migrant caravans are no longer reaching the U.S.-Mexico border as they are now being managed within Mexico.
Analysts suggest that Trump's tariff threats may be more of a negotiating tactic than a steadfast trade policy. David Kohl, chief economist at Julius Baer, stated, \"The lack of a clear link between this threat and questions related to trade suggests the new president plans to use tariffs as a negotiating strategy to achieve goals largely unrelated to trade.\"
Reference(s):
cgtn.com
