- Mexican President Claudia Sheinbaum is hopeful Trump will respect existing free trade agreements.
- In 2024, Mexico exported 3 million vehicles to the US and $100 billion worth of auto parts.
- The threat of sweeping 25% tariffs on Mexican goods puts the country in a difficult situation.
The 25% tariffs that President Donald Trump wants to impose against Mexico from April 2 may cause America’s southern neighbor to slip into recession. Mexico’s huge car and auto parts manufacturing sector is a big part of the reason why, prompting President Claudia Sheinbaum to carefully negotiate with Trump rather than hitting back with retaliatory tariffs as Canada has done.
Mexico exported almost 3 million vehicles to the United States last year and approximately $100 billion worth of auto parts. The US is hugely important to the Mexican economy, and exports across the border accounted for 28% of the country’s annual gross domestic product. Fully aware that Mexico cannot hit back at Trump the same way Canada has, Sheinbaum has adopted a non-confrontational approach to Trump.
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While speaking at a press conference earlier this month, Sheinbaum said, “We’re going to do what’s best for Mexico and seek dialogue with the United States. So far – and I have to give President Trump credit for this – he’s been very respectful.” She added, “We have to wait for April 2 to see what’s coming for Mexico.”
While Mexico’s leader doesn’t want to start a trade war with Trump, it’s unclear if and how she can convince him to not impose the tariffs. Sheinbaum is hopeful Trump will respect the existing United States-Mexico-Canada Agreement, which ensures free trade between the 3 countries and was signed during Trump’s first term.
According to the director of the Center for US and Mexico at Rice University, Tony Payan, Sheinbaum has no choice but to be patient with Trump. While she has committed to strengthening security at the border to reduce illegal fentanyl trafficking, Payan isn’t convinced this alone will get Trump on her side. As part of his American First policies, Trump wants to encourage manufacturers to shift production of their goods from Mexico to the USA.
“Trump is a bully. If you don’t push back, he’s triumphant, and if you push back, he punishes you even harder,” Payan told Auto News. “Canadians have chosen to push back and Mexico has chosen the path of retreating and placating him. And guess what? They are both under the same threat and in the same position.”
