Mexico Considers Bold Retaliation Against Trump’s Tariffs

Donald Trump aims to amplify his “America First” foreign policy during his anticipated second term, with Mexico likely being a central focus.

While previous U.S. presidents have embraced a realist approach to international relations, Trump’s strategy appears less sensitive to the potential repercussions on affected nations.

His proposed policies pose significant threats to Mexico, beginning with plans to deport millions of migrants. This move would strain Mexico’s economy and societal resources. Additionally, an increase in tariffs could severely undermine Mexico’s export sector. Trump’s suggestion of deploying U.S. military forces to combat drug traffickers adds further tension, directly challenging Mexico’s sovereignty and potentially escalating violence along the border.

As an expert in Latin American politics, I recognize that Mexico has various strategies to counteract Trump’s threats, thereby imposing substantial costs on U.S. interests.

Mexican President Claudia Sheinbaum has already indicated her possible responses to Trump’s agenda. Her strategies could include terminating cooperation on immigration and drug issues, as well as imposing her own tariffs. Furthermore, Sheinbaum could reassess longstanding tax benefits for U.S. companies and consider collaboration with China, as it seeks a more considerable foothold in Latin America amid deteriorating U.S.-Mexico relations.

Yet, a negative trajectory is not inevitable. During Trump’s first term, former President Andrés Manuel López Obrador managed a cooperative relationship with the U.S., facilitating several key policies despite the administration’s hostile rhetoric towards Mexico.

Sheinbaum, who began her tenure in early October 2024, adopted a cautious stance initially. She congratulated Trump after his election victory and stressed the importance of maintaining positive relations. “There will be good relations with the United States. I’m convinced of that,” she stated shortly after his victory.

However, Trump’s policies quickly shifted the tone. Following his announcement of a 25% tariff on goods from Mexico and Canada, Sheinbaum asserted that retaliatory measures might be necessary, emphasizing that cooperation is essential for addressing immigration and drug trafficking challenges.

Although Sheinbaum wishes to avoid a trade war, Trump’s threats compel her administration to explore these consequences. A trade conflict could alienate U.S. businesses that have historically supported Trump, highlighting the economic interdependencies that exist across the border.

Trump’s approach, aiming to reorient businesses from Mexico to the U.S., overlooks the repercussions his tariffs would have on American companies reliant on Mexican markets. The potential trade war would likely lead to inflation and disrupt the deeply integrated North American markets.

The relationship between the two nations has facilitated substantial trade, with the U.S. exporting over $300 billion annually to Mexico. Disrupting that flow could lead to significant backlash from the business community, which has previously influenced Trump’s decisions.

On immigration, while Trump issues threats, Sheinbaum has emphasized cooperation and resource allocation for border security. The ongoing management of migration alongside the estimated 4 million undocumented Mexicans in the U.S. presents a complex challenge, one that requires a coordinated response from both countries.

Historic tensions around drug trafficking cooperation have also surfaced, particularly following a high-profile arrest of a Mexican general in the U.S. During her discussions with Trump, Sheinbaum sought to maintain Mexico’s sovereignty while addressing security concerns, a balancing act complicated by Trump’s militaristic rhetoric.

Should U.S.-Mexican relations sour, China stands to gain significantly. Its expanding presence in Latin America could fill the gap left by deteriorating U.S. relations. A trade war would not only change the dynamics of U.S.-Mexico trade but could also facilitate increased Chinese imports and economic cooperation, further weakening the U.S.’s influence.

In conclusion, if Trump’s proposed tariffs are enacted, both consumers and businesses will likely suffer. Increased costs and the rise of Chinese influence could unite various sectors—including investors, trade experts, and consumers—who previously supported Trump but are now concerned about the broader economic implications.