Trump shelves Mexico tariffs, demands China resolve $1 trillion deficit

US President Donald Trump ultimately decided against introducing tariffs on imports from Mexico, a move reportedly driven by pressure from American industrial sectors heavily reliant on cross-border trade.

According to Armando Pineda Osnaya, a professor at the Autonomous Metropolitan University of Mexico, the decision was influenced by the potential economic consequences for US manufacturers, particularly in the automotive and electronics industries, Caliber.Az reports per foreign media.

These sectors depend on a steady flow of components and finished goods from Mexico, with many supply chains structured around frequent border crossings.

Imposing tariffs would have significantly increased production costs, rendering American-made vehicles less competitive both domestically and internationally. The prospect of higher prices for consumers and disruptions to manufacturing operations played a decisive role in shaping the policy outcome, with industry interests prevailing over protectionist measures.

Moreover, Trump has said he will not enter into any new trade agreement with China unless the United States’ trade deficit, which he claimed exceeds $1 trillion, is resolved.

Speaking to reporters aboard Air Force One on April 6, Trump remarked that while the US runs significant trade deficits with several countries, the shortfall with China dwarfs all others.

"We have a $1 trillion trade deficit with China. Hundreds of billions of dollars a year we lose to China, and unless we solve that problem, I’m not going to make a deal," Trump stated. "I’m willing to make a deal with China, but they have to solve this surplus. We have a tremendous deficit problem with China… I want that solved."

He claimed that tariffs imposed during his presidency had led to a substantial uptick in domestic investment, amounting to $7 trillion in committed capital across various sectors, including automotive manufacturing and semiconductor production.

"At levels that we’ve never seen before," Trump said, referring to the scale of incoming investments.

He added that numerous global leaders, particularly in Europe and Asia, had expressed eagerness to negotiate new trade arrangements with the US. However, he reiterated his refusal to engage unless trade deficits are eliminated.

"A deficit is a loss," he said. "We’re going to have surpluses, or we’re, at worst, going to be breaking even. But China would be the worst in the group because the deficit is so big, and it’s not sustainable."

Trump has reiterated his support for tariffs as a key economic strategy, claiming they are the only way to address America’s trade deficits with China, the European Union, and other countries.

In a statement posted on his Truth Social platform, Trump wrote:

“We have massive Financial Deficits with China, the European Union, and many others. The only way this problem can be cured is with TARIFFS, which are now bringing Tens of Billions of Dollars into the U.S.A.”

He praised the existing tariffs as "a beautiful thing to behold" and insisted they had already begun to benefit the U.S. economy.

Trump, who is widely expected to seek a return to the White House in 2024, criticised President Joe Biden’s trade record, claiming the U.S. trade surplus with key partners had grown during what he termed the “Presidency” of Sleepy Joe Biden.

“We are going to reverse it, and reverse it QUICKLY,” he wrote, without specifying how or when such a policy shift would occur.

He concluded by doubling down on his signature economic stance:

“Some day people will realize that Tariffs, for the United States of America, are a very beautiful thing!”

By Aghakazim Guliyev