Mexico economy chief suggests possible tariff retaliation against US

Mexico’s Economy Minister Marcelo Ebrard suggested on Monday that the Mexican government could retaliate with its own tariffs on U.S. imports if the incoming Trump administration slaps tariffs on Mexican exports.

Ebrard made the comments in an interview with local broadcaster Radio Formula, in which he reflected on how President-elect Donald Trump threatened 25% tariffs on Mexican goods during his previous term in office at a time when the Republican leader sought concessions from Mexico’s government on immigration enforcement.

“If you put 25% tariffs on me, I have to react with tariffs,” said Ebrard, who served as Mexico’s foreign minister during the previous incident.

“If you apply tariffs, we’ll have to apply tariffs. And what does that bring you? A gigantic cost for the North American economy,” he added.

Ebrard went on to stress that tariffs will stoke inflation in the U.S., which he described as an “important limitation” that should argue against such a tit-for-tat trade spat.

Mexican President Worries Trump’s Immigration Policies Will Affect Remittances, a Top Source of Income

With an estimated total of $65 billion in 2024, remittances sent from the United States to Mexico are the country’s largest source of foreign currency

Besides the tariffs Trump has promised to impose on Mexico, there’s also the issue of Trump’s plans to conduct mass deportations of migrants which could, in sum, lead the Latin American country to a recession, according to analysts.

On Monday, Sheinbaum herself shed a light on another issues that could prove to be consequential for her administration as Trump assumes office: remittances. Sheinbaum expressed caution during a morning press conference, as reported by La Opinión:

“We hope there will be no impact (on remittances), and we are preparing to hold these preliminary meetings. We are also working on issues related to economic relations, migration, security, and other high-level matters that we need to address, if possible, in a meeting before President Trump arrives.”

Analysts worry that deportations could disrupt this crucial income source, especially as around half of the 11 million undocumented immigrants in the U.S. are Mexican nationals.

Sheinbaum also took the opportunity to advise Mexican nationals in the United States to seek support from local consulates amid concerns about Trump’s recent appointments of key figures associated with past immigration enforcement including Tom Homan, former head of Immigration and Customs Enforcement (ICE), who has already suggested “self-deportations” and workplace raids would be part of his policies once in charge.

In response to Trump’s campaign focus on border migration control, Sheinbaum and her Foreign Minister Juan Ramon de la Fuente have emphasized the administration’s commitment to a “humanitarian” approach that would give continuity to former President Andrés Manuel López Obrador’s policies. “What we are looking for is not only the containment of migration in the south, but also that there can be employment,” added Sheinbaum.

Canada, U.S. should eye own trade deal if no Mexican tariffs on China

Ontario Premier Doug Ford on Tuesday suggested Mexico “shouldn’t have a seat at the table” in upcoming North American free trade talks if it doesn’t match Canadian and American tariffs on Chinese imports — and that Canada and the U.S. should focus on a new, bilateral deal instead.

Ford’s statement comes as North America braces for the return of U.S. president-elect Donald Trump to the White House and a scheduled review in 2026 of the Canada-United States-Mexico Agreement (CUSMA), which replaced NAFTA during Trump’s first term.

Trump, and now Ford, have accused Mexico of allowing Chinese companies to bypass CUSMA rules and export vehicles and parts into the U.S. and Canada through Mexican-built manufacturing plants.

“If Mexico won’t fight transshipment by, at the very least, matching Canadian and American tariffs on Chinese imports, they shouldn’t have a seat at the table or enjoy access to the largest economy in the world,” Ford said in the statement issued by his office.

“Instead, we must prioritize the closest economic partnership on earth by directly negotiating a bilateral U.S.-Canada free trade agreement that puts U.S. and Canadian workers first.”

Canada joined the U.S. earlier this year in slapping 100 per cent tariffs on Chinese imported electric vehicles and 25 per cent levies on Chinese steel and aluminum. Ottawa is undergoing further consultations on whether to expand the tariffs to other Chinese imports. Mexico has not followed suit.

Chinese automakers such as BYD — one of the largest in the world — are seeking to build manufacturing plants in Mexico, where a number of American companies are already building their vehicles at a lower cost. The fear is that those Chinese companies can then take advantage of CUSMA’s duty-free import rules and flood the North American market with Chinese cars while avoiding the U.S. and Canadian tariffs.

CUSMA’s rules of origin clause requires higher levels of North American parts in vehicles sold in the three countries compared with NAFTA, which Trump has said China is also trying to exploit.

Speaking to reporters at an unrelated press conference in Barrie on Tuesday, Ford expanded on his statement and pointed to a trade imbalance between Ontario and Mexico, which he claimed exports the vast majority of $40 billion in annual two-way trade with his province.

“If Mexico wants a bilateral trade deal with Canada, God bless them,” Ford said. “But I’m not going to be drawn down with these cheap imports, taking men and women’s jobs from hard-working Ontarians.”

Asked about Ford’s comments during a press conference alongside New Brunswick Premier Susan Holt, Prime Minister Justin Trudeau said there has been “varying degrees of concern” about Chinese overcapacity and unfair trade practices, and suggested continued cooperation is the best way to confront it.

“We’re going to continue to work with partners like the United States, and hopefully Mexico as well, to make sure that we are united in our desire to protect good jobs” as well as environmental and labour concerns, he said.

Canada has sought to follow the Americans’ lead on trade issues when it comes to China, particularly Chinese EVs. Last week, Deputy Prime Minister and Finance Minister Chrystia Freeland said that unified stance will give Canada a “firm foundation” in upcoming U.S. trade negotiations.

It could also help make the case for Canada to avoid Trump’s promise of a blanket 10 per cent tariff on all foreign imports to the U.S.

Trump has taken aim at Mexican imports in particular over the Chinese auto issue, as well as immigration. At a rally in North Carolina earlier this month, Trump said he will impose a 25 per cent tariff on everything imported from Mexico “if they don’t stop this onslaught of criminals and drugs coming into our country.”

Mexico’s Economy Minister Marcelo Ebrard suggested on Monday that the Mexican government would “have to” retaliate with its own tariffs on American goods if Trump follows through, which he said would bring “a gigantic cost for the North American economy.”

Last month, Trump vowed to impose tariffs of at least 200 per cent or more on all vehicles imported from Mexico — which would hurt American automakers in the short term — and said he could levy Chinese companies who operate in Mexico and bypass CUSMA rules as high as 1,000 per cent.

Trump would likely not need Congress to impose these tariffs, as was clear in 2018, when he imposed them on steel and aluminum imports from Canada and other countries without going through lawmakers by citing Section 232 of the Trade Expansion Act of 1962. That law, according to the Congressional Research Service, gives a president the power to adjust tariffs on imports that could affect U.S. national security, an argument Trump has made.

Much of Trump’s ire toward CUSMA has been focused on protecting the American auto industry and ensuring China can’t exploit its rules of origin clause and benefits for North American imports.

But Mexico could further threaten its place within CUSMA if Mexican President Claudia Sheinbaum pushes through her predecessor Andrés Manuel López Obrador’s policies aimed at eliminating independent regulatory and oversight bodies, and laws the U.S. government says could reduce the independence of the judiciary — both of which are required under the trade agreement.

López Obrador paused relations with the U.S. and Canadian embassies in Mexico after both countries criticized the judicial reforms.

Mexico president lashes out at supreme court amid looming constitutional crisis

Sheinbaum accuses court of overstepping as it prepares to vote on reform that makes almost all judges elected by vote

Mexican president Claudia Sheinbaum has accused the country’s supreme court of overstepping its functions and “trying to change what the people of Mexico decided” as it prepares to discuss whether to strike down parts of a transformative judicial reform.

The court is expected to vote on Tuesday whether the controversial reform violates other parts of the constitution, setting up a showdown with Sheinbaum barely a month into her government.

The move would shift Mexico to a system where almost all of its judges, including the supreme court, are elected by popular vote.

No other country in the world has such a system. The US elects judges at the lower level, while Bolivia elects 26 judges across its top courts. But in Mexico, thousands of positions at all levels would be put to the vote.

Proponents say the reform is needed to root out corruption in the judicial system. Opponents say it will do little to address corruption, but will hand the ruling Morena party control of the courts, while giving organised crime groups another chance to impose their candidates in elections.

“It has to be made very clear that eight justices cannot be above the people,” Sheinbaum told reporters on Monday.

Morena already has a level of political power not seen for decades in Mexico, after its landslide election victory in June gave it a supermajority in Congress and control of enough state legislatures to change the constitution at will.

It has passed a whirl of amendments since, including the judicial reform in September.

The judicial system itself has come out strongly against the reform, with strikes and protests. Though three members of the supreme court have said they support the reform, the other eight showed their resistance by declaring they would not run in the elections scheduled for August 2025.

Now the court will discuss whether the judicial reform violates existing precepts in the constitution in a last-ditch effort to stop it moving forwards.

This has already prompted the legislative to pass another amendment last week that blocks the court from reviewing legal challenges to any constitutional reforms, potentially nullifying any decision that the court takes.

That means if the supreme court does vote against the judicial reform, Mexico will be in uncharted territory. And Sheinbaum will have to decide whether to ignore or comply with the ruling.

“This will lead to a constitutional crisis of a kind we have not seen for the duration of the 1917 constitution,” Olvera Rangel told Proceso, a Mexican magazine.

The dispute has dominated the agenda during Sheinbaum’s first month in government, sucking attention away from other issues such as the expansion of social programs, the further militarisation of public security, and the rising violence in states such as Sinaloa and Chiapas.

It has also spooked markets, leading the peso to depreciate more than 15% against the dollar, and drawn rare public criticism from the US, Mexico’s largest trade partner, which said it jeopardised democracy and rule of the law in the country.

To defuse the crisis, one supreme court judge, Juan Luis González Alcántara, has suggested a compromise: that the top courts stand for election, but the thousands of other judges do not.

But it is unclear whether the other judges on the supreme court would agree to this, let alone Sheinbaum and her party.

Sheinbaum inherited the judicial reform from former president Andrés Manuel López Obrador, who founded Morena and was frustrated when the courts blocked some of his key policies.

Even if Sheinbaum was inclined to negotiate with the supreme court, she could face resistance from power brokers within Morena.

In any case, she has showed no signs of backing down, accusing the court of being a political actor and violating the constitution itself.

On Monday she added that her government has a plan in case the court goes against the judicial reform: “We are prepared, whichever way they vote.”

Mexico said in its own statement that the measure would provide greater reliability and predictability in water allocations to users in both countries, establish new working groups and improve water quality in the Rio Grande basin.

The new measure was the result of 18 months of negotiation, the IBWC said.

Mexico and the United States will establish working groups to “develop water conservation for the benefit of both countries,” the IBWC said.