Mexico floats trade retaliation in response to Trump’s tariff threats

Mexican President Claudia Sheinbaum said her government would retaliate if President-elect Donald Trump moves forward with his threat to impose a 25 percent tariff on the country, warning of severe economic consequences for companies operating in both countries.

Sheinbaum unveiled the letter during her daily press conference in Mexico City, which responded to Trump’s plan to slap 25 percent tariffs on all goods from Mexico and Canada in an effort to crack down on the flow of migrants and illegal drugs into the United States. Trump also pledged an additional 10 percent tariff on China.

“For every tariff, there will be a response in kind,” Sheinbaum wrote in a letter sent to Trump. The text was released by the Mexican Embassy Tuesday morning, which said the economic fallout of a trade war would harm shared enterprises, particularly automotive companies that operate in both countries.

“Among Mexico’s main exporters to the United States are General Motors, Stellantis, and Ford Motor Company, which arrived in Mexico 80 years ago. Why impose a tariff that would jeopardize them? Such a measure would be unacceptable and would lead to inflation and job losses in both the United States and Mexico,” she added, according to a translated version of the letter provided by the Mexican Embassy.

The Mexican automotive industry is particularly exposed to a heightened trade conflict with Washington. Trump has repeatedly complained about auto imports from Mexico, accusing the country of being a back door for China, and floated 200 percent tariffs or higher on vehicles from south of the border.

Sheinbaum said she hopes her team can meet with members of the Trump administration to “continue building joint solutions.”

“President Trump, migration and drug consumption in the United States cannot be addressed through threats or tariffs. What is needed is cooperation and mutual understanding to tackle these significant challenges,” she wrote.

Sheinbaum also pushed back on the U.S.' supposed trafficking of illegal firearms into Mexico, in another signal that cooperation between the North American neighbors might turn cool over the next four years. That would be a departure from former Mexican President Andrés Manuel López Obrador’s at times warm relationship with Trump during his first administration.

“Seventy percent of the illegal weapons seized from criminals in Mexico come from your country. We do not produce these weapons, nor do we consume synthetic drugs. Tragically, it is in our country that lives are lost to the violence resulting from meeting the drug demand in yours,” Sheinbaum wrote.

She added that the Mexican Congress is in the process of approving a constitutional reform that would heighten the penalties around the production, distribution, and commercialization of fentanyl. But acknowledged that the flow of chemical precursors used to produce synthetic drugs “underscores the urgent need for international collaboration.”