In the face of the threat by the president-elect of the United States, Donald Trump , to impose tariffs of up to 25% on Mexican products, which would especially affect the automotive and electronics industries, the global firm that offers trade data, CIAL Dun & Bradstreet , analyzed some challenges and opportunities for Mexico, within which it considered that the probability of applying tariffs is low due to the economic integration between both countries and its inflationary impact on its northern neighbor .
He indicated that Trump’s arrival to his second term occurs at a very particular moment for Mexico in terms of its local condition, due to the election of Claudia Sheinbaum with a qualified majority in Congress and that gives her the possibility of making constitutional changes without any restrictions. In addition to the decision to reform the Judicial Branch and the possible elimination of autonomous bodies , which is in the legislative process.
In the analysis Cial Insights: Economic and Financial Monitor, it was pointed out that Mexico’s economic context faces a fiscal deficit close to 6% of the Gross Domestic Product (GDP) , doubling in just a few years and being the highest since 1988; in addition to the fact that public debt is exceeding 50% of GDP.
Another element that was considered is that this year the Mexican economy slowed down significantly to just 1.3% , while in the United States the pace remains at an estimated 2.8% growth in 2024.
In this context, the company said that Donald Trump’s threats against Mexico are not new. In 2016, he said he would impose a 10% tariff if Mexico did not control its southern border to prevent the growing migration to the United States.
He also recalled that he applied tariffs on steel and aluminum for a time and proposed a review of the North American Free Trade Agreement (NAFTA) and from this emerged the Treaty between Mexico, the United States and Canada (T-MEC) , which he said was the best treaty for the United States in its history.
However, the US trade deficit with Mexico did not stop, and went from $123 billion in 2016 to $171 billion in 2020, his last year in office. He did not achieve his goal of reversing the deficit, although regional content in the automotive industry was raised to 70%, which was good for the region.
The analysis predicts that, in 2024, the trade surplus with the northern neighbor will be around 260 billion dollars (mdd) , and that Trump would start a trade war with China, which would lead to the ” nearshoring boom “, which would benefit Mexico, who today is the first supplier of goods to the United States.
CIAL Dun & Bradstreet pointed out that from 2000 to 2024, Mexican exports to the United States grew by an average of 5.3% annually, while Mexican imports from that country increased only 2.9% annually. Meanwhile, in the same period, Mexican exports to Canada grew by an average of 7.6%annually, compared to 5% for our imports from that country.
“Since the time of NAFTA, the great beneficiary in terms of foreign trade has been Mexico. This is one of the reasons why the United States is now assuming a threatening posture against Mexico, in an attempt to reverse this balance. It will be difficult because they are now highly integrated economies,” the document indicated.
Another point that the consulting firm considered is Mexico’s foreign trade with China, a country with which a growing trade deficit was reported from $4 billion in 2001 to $115 billion in 2024.
He stressed that our country’s trade balance with Europe has also deteriorated over time, as the Mexican deficit with that region went from $8.917 billion in 2000 to more than $50 billion in 2024. Mexican exports to that region grew by an average of 6.4% annually between 2000 and 2024, while imports grew by 7.1% annually.
“Mexico reports growing trade surpluses with our USMCA partners, while reporting growing deficits with other regions such as China and Europe. Donald Trump would seek to reverse this condition, for which he is threatening to impose tariffs of 25% on Mexico and 60% on China. In particular, he would impose a 100% tariff on vehicles exported from Mexico and, if necessary, up to 200%, in order to reduce the deficit and encourage North American companies to maintain their investments in the United States,” the firm estimated.
The study predicts that if Donald Trump’s threat to impose 25% tariffs on Mexico is realized , there are several entities in the country that would be affected , and recalled that the four largest exporters in the country are Chihuahua, Coahuila, Nuevo León and Baja California. In addition, the nine states that make up the northern part of the country represent almost 53% of total exports.
“There are 12 entities in which transportation equipment (automotive) is their main export segment, with a presence of around 60% on average of their total exports,” he stressed.
He pointed out that the sectors that would be affected include the computer and electronic equipment, transportation equipment, and the vehicle industry . He also stressed that Trump would implement “the largest deportation in history,” since it is estimated that there are between 14 and 15 million undocumented or illegal immigrants in the United States, of which between four and five million are Mexicans, although it is possible that these deportations will not be massive, given that the northern neighbor needs labor.
Among its conclusions, the company noted that the United States and Mexico are highly integrated in their productive activity, and currently, for the second consecutive year, Mexico is already the main supplier of goods to its northern neighbor .
He estimated that the probability of the United States applying 25% tariffs to Mexico is low, considering that the conflict is more with China, and the degree of integration between both economies. “Applying tariffs to Mexico could mean an increase in costs for consumers and, therefore, an inflation problem, with all that this entails.”
He indicated that after Trump takes power, “ we must monitor the decisions he makes and develop appropriate scenarios regarding the possible effects on the Mexican economy. This will also determine the position that the United States will take with respect to the review of the USMCA in 2026, taking into account that in Canada there is talk of excluding Mexico from this agreement.”
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