Mexico, unexpected winner with Trump’s tariffs

Mexico is the unexpected winner of the tariffs imposed by the president of the United States, Donald Trump, he asserted The Wall Street Journal (WSJ).

According to a report in this publication, although economists and officials estimated that the Mexican economy would suffer “a devastating impact” from the imposition of tariffs in early 2025, time has shown that Mexican exports to the northern neighboring country have increased almost 9 percent in the period from January to November compared to the same period last year.

He WSJ noted that the tariffs imposed on Mexico in the second Trump administration are the lowest compared to the rest of the world.

He emphasizes that the disparity in tariffs has helped compensate for part of the gap left by Chinese products, which pay higher tariffs.

In that sense, he indicated that the effective tariff rate for Mexico is 4.7 percent, while that of the Asian giant is 37.1 percent. The overall effective rate worldwide is around 10 percent.

The report also emphasizes that Mexico continues to be attractive for producers, as it is geographically close to the United States, the manufacturing industry is low-cost and the T-MEC, despite the deterioration, remains standing.

The report emphasizes that trade between the United States and Mexico is set to reach $900 billion by the end of 2025, which also occurs despite high tariffs on automobiles – whose exports fell 6 percent –, steel and aluminum.

He WSJ referred to the case of Nearshore Co., a firm that helps foreign manufacturers produce goods that are headed to the United States in its 18 plants located in Mexico. According to Jorge González Henrichsen, co-executive director of this company, on April 2, Liberation Day, the manufacturing projects that had been suspended due to the entry of tariffs were reactivated.

This is because Nearshore Co.’s customers concluded that Mexico was in a better situation than many other U.S. trading partners, including rival manufacturers in Asia.

He WSJ He indicated that the Bank of Mexico estimates a growth of 0.3 percent for the Mexican economy, a figure that, although “anemic,” is far from the one percent contraction that was expected.

The report also highlights that Mexico overcame concerns about a “zombie” treaty between the United States, Mexico and Canada, because although the agreement is undermined by unilateral tariffs, it remains. Even 85 percent of Mexican exports remain tariff-free under the T-MEC.

The newspaper also highlights the dialogue that President Claudia Sheinbaum Pardo has had with Trump. In addition, he emphasizes that the Mexican government has strengthened the fight against drugs on the border, expelled cartel leaders and imposed tariffs of up to 50 percent on vehicles and other goods manufactured in China. This has “deterred US threats to impose tougher tariffs.”

He recalled that the United States trade representative, Jamieson Greer, said that Mexico captured 25 percent of the reduction in his country’s trade deficit with China, which shows Mexico’s key role in the resilience of the region’s supply chain.

Additionally, Mexico surpassed China as the main supplier of foreign goods to the United States in 2023 and became its largest buyer (https://bit.ly/44upL2F).