Mexico's leader pledges tariffs in retaliation to Trump’s 25% duty threat

Mexican President Claudia Sheinbaum has suggested that Mexico could impose retaliatory tariffs in response to U.S. President-elect Donald Trump's threat to impose 25% duties on Mexican goods.

Trump's threat came after he demanded Mexico curb the flow of drugs and migrants across the border, Caliber.Az reports, citing foreign media.

“One tariff would be followed by another in response, and so on until we put at risk common businesses,” Sheinbaum said, referring to U.S. automakers with plants in both countries. She noted Mexico's efforts to reduce migrant caravans but also highlighted the country’s struggle to fight drugs like fentanyl, which is produced by Mexican cartels using chemicals from China.

Sheinbaum argued that drug trafficking is a U.S. public health issue and criticized U.S. spending on weapons, suggesting it should be redirected to address migration's root causes. “If a percentage of what the United States spends on war were dedicated to peace and development, that would address the underlying causes of migration,” Sheinbaum said.

Her defiant stance contrasts sharply with former President López Obrador’s more conciliatory approach to Trump. “We negotiate as equals, there is no subordination here, because we are a great nation,” Sheinbaum added.

Economist Gabriela Siller warned that Sheinbaum’s response could escalate tensions, potentially triggering tariffs from Trump. “But Mexico’s response, that we’re going to respond to you with tariffs, that will make Trump really impose them,” Siller said.

On November 25, Trump said he would impose a 25% tax on all products entering the country from Canada and Mexico, and an additional 10% tariff on goods from China, as one of his first executive orders. 

The tariffs, if implemented, could dramatically raise prices for American consumers on everything from gas to automobiles to agricultural products. The U.S. is the largest importer of goods in the world, with Mexico, China and Canada its top three suppliers, according to the most recent US Census data.

Trump made the threats in a pair of posts on his Truth Social site in which he railed against an influx of illegal migrants, even though.

Sheinbaum offered dialogue as the solution, saying, “Dialogue is the best path to achieve understanding, peace and prosperity for our two countries.”

By Khagan Isayev