Mexico Responds Furiously to Trump Tariff Plan

mexico city - Mexico vows to retaliate against any US tariff hike with its own, as tensions rise over Trump's threats to increase import duties on Mexican goods.

In response to every American tariff increase on goods from Mexico, the southern neighbor will retaliate with a tariff increase on export products from the United States. The Republican, set to take office for the second time on January 20 in the White House, threatens to raise the import duty on all goods from Mexico by 25% on his first day by presidential decree. The tariff increase will only be reversed if Mexico stops drug smuggling and illegal immigration to the US.

"The tariff will remain in place until the invasion of drugs, particularly fentanyl, and all illegal immigrants to our country, stops!" Trump wrote on his social network Truth Social. The highly addictive painkiller claims around 80,000 lives annually in the US.

Trump also referred to the caravan of "thousands of people" currently marching from Southern Mexico towards the US border with the aim of entering the country before Trump becomes president. In reality, there are 1500 migrants.

Since Biden took office in 2021, the US Border Control has apprehended eight million people who illegally crossed the border from Mexico. During Trump's first term (2017-2021), that number was 2.4 million.

"Mexico and Canada have the absolute power to easily solve this long-standing problem," Trump wrote. "We demand that they use this power." Until that happens, "they will pay a very high price for it!"

Eighty percent of Mexico's exports go to its northern neighbor, making the economy highly dependent on trade with the US. After Trump's statements, the Mexican peso immediately fell against the dollar.

Claudia Sheinbaum reminds the future US president of "the efforts" Mexico is making to prevent fentanyl and illegal immigrants from entering the United States.

"President Trump, threats or import duties will not solve immigration and drug use in the United States," she writes in her letter. "Cooperation and mutual understanding are needed to solve this major problem."

"Imposing tariffs on tariffs would result in a loss of competitiveness. It is unacceptable and would lead to inflation and job losses in Mexico and the United States," Sheinbaum warned.

The imposition by the US of trade tariffs on Mexico (and Canada) would violate the USMCA free trade agreement, the successor to NAFTA signed in 2020 and endorsed by Trump himself. Trump may be using his threats as a negotiating tactic because in 2026 a clause from the trilateral free trade agreement, TMEC in Spanish, must be revised. The US would like to take this opportunity to end Mexico's role as a gateway for large-scale imports of Chinese goods.

Washington is not alone in this. Ottawa also accuses Mexico of allowing itself to be used by China as a "backdoor" to get Chinese products into the Canadian market. Prime Minister Trudeau has suggested going forward with the US alone if Mexico does not address the issue.

Claudia Sheinbaum has assured both countries that Mexico prioritizes the North American Free Trade Agreement over trade relations with China, Europe, or Latin America. She reminded Trump on Monday that Mexico had already raised its tariffs on products produced in China and other countries by "5 to 50%" in April.