The threats of the president-elect of the United States, Donald Trump , who will take office on January 20, could have strong impacts on the Mexican economy, especially due to the possible imposition of tariffs and the lack of favorable agreements in the revision of the Treaty between Mexico, the United States and Canada (T-MEC) , which could slow down or reduce economic activity in the country.
This was the opinion of Alfredo Careaga , Business Development Director of THB Mexico , who said that the northern neighbor is the most important market for Mexico in terms of exporting products manufactured in the country.
According to figures from the United States Census Bureau, from January to November 2024 the accumulated value of Mexican exports was 466,625 million dollars (mdd) , which meant an increase of 6.4% compared to the same period in 2023.
In the penultimate month of 2024 alone, exports increased by 6.03% , sending goods to the United States worth 42,249 million dollars , compared to the same month in 2023, when it was 39,844 million dollars . According to the same office, Mexico is the main exporter to the United States and the second in the import of products of American origin.
In light of Trump’s recent suggestion that he would create an “External Revenue Service” that would be responsible for collecting tariffs on foreign imports, the specialist pointed out that the collection in the United States is different from that in other countries, and that it could be a speech to his electoral base and the people who supported him in real terms.
“The United States has always had a very clear policy, different from all other countries in the world, in that they levy taxes based on nationality regardless of where the individual resides. I understand that, for legal entities, it is very similar, I mean, we will have to see what real impact it has,” Careaga stressed in an interview with T21.
For Alfredo Careaga, the key issue in trade relations between the two countries will be the possible imposition of tariffs on Mexican products , which could extend to other economies around the world and even affect American consumers.
“Imposing tariffs not only affects us, but also the American consumer. It is a bit, perhaps contradictory in the sense that one of Trump’s policies is that they want to control inflation. They want to control a bit the number of countries that there have been since the beginning of the COVID-19 pandemic,” he said.
Regarding the review of the USMCA, the executive assured that it will be complicated by Canada’s involvement in this negotiation.
“I see it as complicated, and not just because of the Mexico-United States dynamic, but we must remember that there is a third player in the treaty, which is Canada, and Canada also had its internal problems with the resignation of Justin Trudeau, precisely because of the resignation of his Finance Minister, Chrystia Freeland, and we have to see what happens with the government in Canada, it seems that the Conservatives are going to win,” he said.
The Mexican automotive industry , which is making progress in its recovery after the COVID pandemic , would be one of the most affected by this review , if Donald Trump puts it on the table, along with other non-commercial issues, such as migration and security.
According to data from the Mexican Automotive Industry Association (AMIA) , this sector reached a new historical record in 2024 with the production of three million 989 thousand 403 units , surpassing the previous maximum of three million 933 thousand vehicles in 2017.
Last year, the United States remained the main export destination, receiving 80% of the vehicles shipped abroad, followed by Canada, with 8.5% , and Germany, with 3.6 percent .
These figures would be reduced if good terms are not reached in the negotiation of the trilateral trade agreement, said Careaga, who considered that other industries in which there would be consequences would be transportation and trade, since in Mexico there are projects to expand the railway lines in order to facilitate the transfer of goods and people, in addition to saving costs.
“If you put tariffs on, there are products that are arriving in Mexico because it was a little cheaper to bring them here, not only in terms of taxes, of bringing them into Mexico and transporting them, but simply because of the economic cost that I am saving with it,” he explained.
He also stated that a review of the USMCA is necessary , especially to update it and improve it according to the situation of each country involved in this agreement, since it cannot remain a “document in stone.”
Impacts on supply chains
Trump would be shooting himself in the foot with the protectionist trade policies he seeks to implement, said Careaga, who recalled that the business issue and the focus on Mexico as a supply center for the United States was the trade fight or war that Donald Trump had with China in his first term as president of our northern neighbor.
“On the one hand, he fought with China, but now it seems that he is fighting with Mexico. In the end, it seems to me that the United States cannot live in that bubble and it does need something, this commercial ally for supply issues in terms of cheap manufacturing, and the most natural thing is that it would be Mexico, so that is why Trump’s position is a little contradictory; it seems to me that it is a mistake to fight with both of them,” stressed Careaga.
He also pointed out that much of the foreign investment Mexico has received is not only from the United States but also from China, since this Asian nation sees our country as a way to maintain its entry of products into the United States.
“The largest and strongest market is still the American market, and if Mexico is forced to choose between the American market and the Chinese market, the best option is for our country to stick with its regional trading partners,” the specialist said.
Trump and his expansionist policy
Alfredo Careaga considered that Trump’s desire to change the name of the Gulf of Mexico to the “Gulf of America” is a tantrum , since it shows his nationalism and makes noise with his electoral base.
Furthermore, if this happens, it shows that the next president of the United States wants to renew his interest in strategic points and geographic areas that interest him , such as the Panama Canal , Greenland and the aforementioned Gulf of Mexico, where important seaports such as Altamira and Veracruz are located .
“Trump’s presidency will not be the easiest for the current administration, but we will have to find a way to make Trump see us as a commercial ally,” said Careaga.
Despite the possible adversities, for Careaga there are opportunities to make a good negotiation of the T-MEC, in addition to the possibilities of promoting Mexican economic growth, in parallel with other projects such as the Plan Mexico , which contemplates national and foreign investments, and includes around two thousand specific projects aimed at strengthening strategic sectors , improving competitiveness and promoting sustainable development .
Regarding this, the Business Development Director of THB Mexico said that our country is closely linked economically with the United States, so starting a war with them is not convenient, to which he suggested that it is better to take advantage of the situation to boost our economy .
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