Mexican President Claudia Sheinbaum has warned that tariffs imposed by US President-elect Donald Trump would lead to job losses and inflation in both countries. Sheinbaum stated that Mexico would retaliate with its own tariffs if the US imposes the proposed 25% across-the-board tariff, which could kill 400,000 US jobs and drive up prices for US consumers.
Mexican Economy Minister Marcelo Ebrard also cautioned that the tariffs would lead to massive US job losses, lower growth, and increased taxes for US companies producing in Mexico, citing the 88% of pickup trucks sold in the US being made in Mexico and facing a $3,000 price increase.
Sheinbaum and Trump spoke by phone, with Trump claiming that Sheinbaum agreed to stop migration through Mexico and into the US, effectively closing the US-Mexico border. However, Sheinbaum refuted this, saying that Mexico’s migration strategy is to build bridges between governments and their peoples, not to close borders.
Many analysts view Trump’s tariff threat as a negotiating tactic rather than a genuine trade policy, and the Mexican peso strengthened by nearly 1% against the dollar in after-hours trading on Wednesday, reversing losses logged in previous days. The proposed tariffs could wipe out the profits of the Detroit Three automakers, according to analysts at Barclays.