Mexican President Claudia Sheinbaum had still confidently sounded confidence at her daily press conference on Wednesday. “I don’t think it will happen,” she had resolutely answered the question of whether the import duties, where American President Donald Trump had been in alluding for months, would actually be introduced. Characteristic of the attitude of the Mexican government towards Trump: wait.
Upon his appointment, Trump said to introduce taxes of 25 percent on 1 February on all products that Mexico exports to the United States. Nevertheless, Mexicans saw the words of Trump as threats to encourage their country to make more concessions in other areas. Surely there was the North American free trade agreement between Mexico, the US and Canada, which was (re) negotiated during Trump’s first term during Trump’s first term?
There is no country that is as dependent on the US as Mexico in terms of trade: the total trade between the two countries in 2023 was around $ 780 billion, an economic relationship that has grown by around 70 percent in the last ten years. And although this relationship is crucial, especially for Mexico – with more than 80 percent of the exports that go to the US – the American interests are also great: in 2023 there was more than 322 billion dollars to the Zuiderburen.
Every year in Mexican cities such as San Luis Potosí, Monterrey and Guanajuato millions of Fords, Nissans and Chevrolets are made in addition to hundreds of thousands of European cars. About two thirds of those vehicles are intended for the American market. Trump’s ally Elon Musk even bought land in Monterrey to build a Teslafabriek. But also in the short term, Americans can already feel the effects: on 9 February the Super Bowl is on the program, where sport fans are massively laving (partly Mexican) beer to Guacamole, made from Mexican avocados.
Corruption and cartels
In a matter of facts of the White House, it is made clear in few words why Mexico deserves these rates: with Canada and China, the country would do too little to stop the smuggling from Fentanyl to the US. The taxes will be in force “until Mexico cooperates with the US in the fight against drugs,” writes the White House.
“Mexican cartels are the world’s greatest traders in Fentanyl, meth and other drugs. These cartels have an alliance with the government of Mexico and endanger the national security and public health of the United States, “the text says. Hard words, which are not untrue. Corrupt Mexican officials are at the highest level, fentanyl smuggled from Mexico leads to around 100,000 fatal overdoses in the US and Mexican drug cartels earn billions with the trade of the synthetic drug.
The reaction of Sheinbaum to the announced rates did not take long. On X, the Mexican president lashed out to “the defamation of the White House”, by pointing out stores in the US that sell weapons to Mexican cartels and the lack of opioid epidemic in the US. “Problems are not solved by imposing rates, but by talking and entering into dialogue,” she said, and pointed to the work that her government resists to tackle crime, drug trafficking and migration.
In the past four months, according to the government, nearly 140 drug laboratories have been destroyed, more than 1.3 tons of fentanyl have been seized and the army has been deployed to tackle, among other things, factions of the Sinaloakartel, the largest trader in Fentanyl. More than ten thousand people have been arrested since the arrival of Sheinbaum due to ties with organized crime, according to national authorities. Furthermore, the Constitution has recently been changed to ban the production and sale of chemicals with which Fentanyl can be made.
Drug cartels in Mexico are too powerful and often too shattered to tackle effectively. There are thousands of drug labs in states such as Sinaloa, the home of the cartel of the same name. The harder approach of Sheinbaum does not yet result in a visible decrease in violence or drug smuggling. The new policy is nevertheless a gesture to the Noorderburen.
Migration also plays a role
In addition to fentanyl and cartels, there are more, not explicitly mentioned by the White House on Saturday that justify the taxes on Mexican products for Trump. Migration is one of them. Since his appointment, many Trump decrees were focused on the southern border, where he announced the state of emergency.
Almost all migrants who came to the US in recent years crossed Mexico. For Trump, Mexico has to do much more to stop this ‘invasion’. Mexico has been pursuing a restrictive policy since December 2023 in which migrants are kept away from the American border on their way to the US. The militarized National Guard checks passenger buses on motorways, there are checkpoints on all access roads to the border and who is picked up is flown without mercy to the south of Mexico.
Since Trump took office, Mexico receives not only set out subjects, but also migrants from Venezuela, Guatemala, Nicaragua and even Bangladesh. In everything, the Sheinbaum government tried to be the US government for the sake of, among other things, to prevent a trade war. And with success, it seemed: last week, Karoline Leavitt, the press chief of the White House, also emphasized that there was “a historical level of cooperation from Mexico”.
Apparently the US government wants more. Returning with rates on American products, with which Sheinbaum threatened earlier, can further escalate the conflict: Trump has included a retaliation clause in the Saturday signed decree, including the American taxes go up if Mexico dares to give something back.
Analysts warn that economic growth in Mexico can at least fall two percentage points due to the rates, and that production chains can disappear, close factories and unemployment can rise if the rates persist for a long time. Mexico awaits a recession if the situation persists, it is clear. Sheinbaum and Mexico will have to do even more to avert an economic doom scenario.