Mexican President Claudia Sheinbaum raises her fist while shouting 'Viva Mexico' while presenting the so-called Plan Mexico aimed at strengthening the country's economy, at the Anthropology Museum in Mexico City on April 3.YURI CORTEZ/AFP/Getty Images
President Claudia Sheinbaum is celebrating Mexico’s exclusion from Washington’s so-called reciprocal tariffs, crediting a relationship of “respect,” “co-ordination” and “frank dialogue” with U.S. President Donald Trump for the fact most Mexican goods complying with the United States-Mexico-Canada Agreement will continue to have duty-free access to the U.S. market.
“This international situation can obviously have some impact on Mexico,” Ms. Sheinbaum said Thursday morning, referring to the steep tariffs Mr. Trump announced the day before on dozens of countries, including China and Vietnam. “But until now we have had preferential treatment,” which “has to do with the relationship of respect that we have built with President Trump – of mutual respect, as it should be.”
Economy Minister Marcelo Ebrard portrayed Mexico’s treatment under Mr. Trump’s tariff regime as “a great accomplishment,” telling reporters, “I would say that from the point of view that when this started not long ago, there were not going to be any exceptions.”
Claudia Sheinbaum counters Trump’s tariffs with a ‘cool head,’ focus on continental trade
Ms. Sheinbaum has walked a fine line in dealing with Mr. Trump. She has battled to keep the border open to Mexican exports, while responding to U.S. security demands by stepping up migration enforcement, decommissioning synthetic opioid labs and cracking down on drug cartels.
She has preferred to not antagonize Mr. Trump and has never outlined or implemented retaliatory tariffs – unlike Canada – insisting instead on “co-ordination” and “co-operation” with the United States. She has also doggedly defended continental free trade.
Mexico sends 83 per cent of its exports to the U.S. – everything from avocados to automobiles and beer. Exports have mushroomed over the past three decades with continental free trade, expanding sevenfold to US$603-billion in 2023, according to Mexican bank Intercam. Mexico sent 2.8 million automobiles to the U.S. in 2024, according to state statistics service INEGI, accounting for 18.8 per cent of all Mexican exports to America.
Despite Wednesday’s good news, though, Mr. Trump imposed 25-per-cent tariffs on Canada and Mexico in March after declaring a national emergency on fentanyl smuggling and illegal migration on the southern and northern borders. He later granted an exemption for USMCA-compliant goods, and that exemption has been continued. The 25-per-cent tariff on goods not complying with USMCA rules will drop to 12 per cent if the executive order on fentanyl and migration is lifted.
“It’s a good result,” said Juan Carlos Baker Pineda, a former Mexican trade negotiator. “This is a subtle acknowledgement that Mexico and Canada run on a different track than the rest of the world.”
But he added, “We’re speaking on how Mexico is relatively better off than the rest of the countries without really remembering that Mexico should be tariff zero.”
The U.S. has maintained a 25-per-cent tariff on steel and aluminum and a similar levy on Mexican-made automobiles, as long as they comply with USMCA rules.
Roughly 50 per cent of Mexican exports comply with USMCA rules, compared with 38 per cent of Canadian goods, according to Diego Marroquín Bitar, a trade scholar at the Wilson Center in Washington. He estimated the Mexican figure could rise to 85-per-cent compliance this year as companies adjust their supply chains.
'Made in Mexico' push aims to offset Trump's tariff threats
While Canada and Mexico “fared better than the rest of the world,” Mr. Bitar said, “between the two, no clear winner has emerged at a national level. The impact will vary across industries. Canada’s energy sector will initially hold an advantage, while Mexico’s auto industry may weather the storm more effectively due to the higher U.S. content in its exports.”
Mr. Trump’s tariff threats come as the Mexican economy slumps. It contracted 0.2 per cent in January from the previous month, according to INEGI. The Finance Ministry slashed its 2025 forecast Tuesday, while a central bank survey showed private-sector economists projecting growth of just 0.5 per cent.
“The economic slowdown has been ongoing since last year and has only worsened with Trump’s tariffs,” said Gabriela Siller, chief economist at Banco Base in Monterrey. “We’re on the verge of a recession.”
“Trump’s initiatives are killing confidence,” said François Ouellet, general manager and country representative for Exo-s, a Sherbrooke, Que., company with Mexican operations.
“I know there will be no duty to my parts that are going to the States,” he added, but “if I foresee general demand going down,” the Exo-s plant in San Juan del Río, 170 kilometres northwest of Mexico City, “will need to reduce production.”