Mexico threatens retaliation over Trump tariffs

Mexican President Claudia Sheinbaum said her country could retaliate against Donald Trump’s threatened tariffs with its own tariffs, as the president-elect takes on top US trading partners, in a move that would have dramatic economic consequences for both sides could have.

Sheinbaum responded to Trump’s threats on Tuesday during her daily news conference in Mexico City, where she read from a letter she plans to send to the president-elect.

“One tariff will be followed by another in response, and so on, until we endanger ordinary businesses,” Sheinbaum said.

“The main exporters from Mexico to the US are General Motors, Stellantis and Ford Motor Company, which arrived 80 years ago. Why introduce a tariff that puts them at risk?’ she asked.

Sheinbaum responded after Trump took to social media on Monday evening to threaten 25 percent tariffs on all products entering from Mexico and Canada, while claiming people are flooding into the US.

“This tariff will remain in effect until drugs, especially Fentanyl, and all illegal aliens stop this invasion of our country!” he wrote.

Sheinbaum said her letter called for joint discussions on migration and fentanyl. She said she hoped her team and Trump’s could meet soon.

Sheinbaum argued that Mexico has taken steps to stem the flow of migrants and said the caravans that Trump claimed were heading from Mexico to the U.S. have already stopped reaching the border.

Images from Tehuantepec, Mexico on November 24 show migrants taking part in caravans to reach the US, lining up to board buses to go to other parts of Mexico after accepting help from Mexico’s National Migration Institute.

It suggests that the flow of migrants moving north is being addressed, as Sheinbaum claimed.

Sheinbaum called the flow of drugs into the US a ‘problem of public health and consumption in the society of your country.’

Drugs such as the deadly synthetic fentanyl are manufactured by Mexican cartels using chemicals imported from China.

She also argued that Mexico is suffering from the influx of weapons smuggled into the country south from the US

Migrants participating in U.S.-bound caravans took buses to several towns in Tehuantepec, Mexico, on Nov. 24. Mexican President Sheinbaum said Mexico is already taking steps to stop the US-bound caravans before they reach the border.

Migrants lined up to board buses in Tehuantepec, Mexico, to other parts of the country after taking part in caravans. They received help from the Mexican National Migration Institute

President-elect Trump threatened to impose 25% tariffs on all products from Mexico and Canada in a Truth Social post on Monday evening. He also threatened additional 10% tariffs on products from China in a separate social media post

Trump’s threat to impose tariffs on Mexico and Canada, which along with China are the largest importers of goods into the US, is the latest in a series of threats Trump has made to impose tariffs during his 2024 presidential campaign .

He has used such threats as a negotiating tool to try to make demands on both adversaries and allies, but if tariffs were imposed it would have a dramatic impact on the economy. American consumers with rising prices.

Mexico and the U.S. auto industry would be particularly vulnerable if a trade dispute escalates because factories on both sides of the border depend on each other for parts. A trade war could bring production to a standstill.

Mexican factories that export electronics and other goods to American consumers would also be at risk.

But Mexico and Canada are also the biggest buyers of U.S. goods, taking in more than $688 billion so far this year, according to Census Bureau data.

Following Trump’s threat of tariffs on Monday, the Mexican peso and Canadian dollar fell.

Sheinbaum’s response to Trump on Tuesday suggests that the newly elected president may face a very different type of Mexican leader than when he first took power.

In 2018, former Mexican President Andrés Manuel López Obrador developed a friendly relationship with Trump. Ultimately, they managed to strike a deal to appeal to migrants, with Trump backing away from threats.

It seems less likely that Sheinbaum, who took office in October as the country’s first female president, will coddle the newly elected president.

‘We negotiate as equals. There is no subordination here because we are a great nation,” Sheinbaum said.

She added that she thinks they will reach an agreement.

On Monday, Trump threatened to impose 25 percent tariffs on all products from Mexico and China as one of his first executive orders on his first day in office on January 20.

The president-elect threatened in a separate post to impose an additional 10 percent tariff on top of other tariffs on all products from China until the flow of drugs into the US stops.