(TheLastPatriotNews.com) – In an early attempt to preempt Donald Trump’s ambitious agenda, Mexico considers retaliatory tariffs if the new U.S. president-elect enforces spiked tariffs on their imports.
A fragile trade dynamic lies at the heart of escalating tensions, with both nations poised to face economic consequences.
Marcelo Ebrard, Mexico’s economy minister, has voiced his country’s readiness to implement tariffs if the U.S. carries out threats to impose new taxes on Mexican imports.
These potential tariffs are a response to Trump’s proposed duties, allegedly aimed at curbing U.S. businesses from outsourcing to Mexico.
By considering such measures, Ebrard highlights the delicate nature of border economies left vulnerable to political standoffs, Reuters writes in a report.
Mexico relies heavily on exports to the U.S., with a staggering 80% of their goods crossing the border.
The country is thus in a difficult quandary as President-elect Trump threatens 25% tariffs on Mexican imports unless Mexico addresses migration and drug flow issues.
Further intensification of trade disagreements could disrupt industries in both nations, hurting consumers.
“If you apply tariffs, we’ll have to apply tariffs. And what does that bring you? A gigantic cost for the North American economy,” Ebrard said, cited by Semafor.
President-elect Trump has indicated tariffs could skyrocket to 100% for noncompliance, a move that could drastically affect Mexico’s export-driven economy.
However, this approach might complicate America’s broader trade stances globally, especially against China.
Trump plans to impose substantial tariffs on China, up to 60%, but excessive tariffs might raise domestic prices, causing unintended consequences for American consumers.
Observers note that with the U.S. elections spotlighting Mexico as a target of Trump’s strict border policies, the importance of Mexico as a trade ally is enormous.
The appointment of Tom Homan as border czar signals a more aggressive approach to immigration and border security.
New Mexican President Claudia Sheinbaum’s diplomatic response will be vital for future North American relations.
“[Trump] continues to make China the bogeyman and has indicated he will get more aggressive,” one expert told CNBC
The outcome of this tension-filled scenario could have sweeping repercussions.
Both Mexico and the U.S. have significant stakes in maintaining amicable trade relationships, as evidenced by U.S. sectors that historically rely on Mexican exports.
With U.S. exports to Mexico comprising almost 16% of total American exports in 2022, any disruption could be detrimental to American job markets, according to the Reuters report.
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