‘Would Kill 4 Lakh Jobs In US…’ Mexican President Warns Trump Of Retaliation On Tariffs

Mexico Responds To Trade Tariffs: Mexican President Claudia Sheinbaum has vowed to retaliate if US President-elect Donald Trump enforces a proposed 25 per cent tariff on Mexican imports, warning that the move could harm both economies. Speaking at a press conference on Wednesday, Sheinbaum declared, "If there are US tariffs, Mexico would also raise tariffs."  

The proposed tariff, which Trump has linked to curbing drug and migrant flows into the US, has drawn sharp criticism from Mexican officials, who argue it would violate the USMCA trade deal and lead to significant economic fallout.  

Potential Impact on US Economy and Jobs

Economy Minister Marcelo Ebrard, speaking alongside Sheinbaum, said the tariffs would damage regional cooperation, urging instead for integration. "It's a shot in the foot," he said, estimating the tariffs could result in 400,000 US job losses, increased consumer prices, and disrupted supply chains.  

Ebrard highlighted the heavy impact on the automotive sector, particularly on US-based manufacturers like Ford, General Motors, and Stellantis, which rely on Mexican production. He noted that nearly 88 per cent of pickup trucks sold in the US are made in Mexico, and their prices could rise by $3,000 each, disproportionately affecting rural Trump supporters.  

Barclays analysts warned the tariffs could erase profits for the Detroit Three automakers, while the Institute of International Finance cautioned that escalating protectionism could hurt economic growth and regional stability.  

Sheinbaum and Trump Discuss Migration and Trade

In a phone call with Trump later on Wednesday, Sheinbaum outlined Mexico’s migration strategy, which focuses on addressing migrant issues before they reach the US-Mexico border. Trump, however, claimed on his Truth Social platform that Sheinbaum had agreed to "effectively close our Southern Border," a statement she appeared to refute in her response on X.  

"Mexico's stance is not to close borders, but to build bridges between governments and their peoples," Sheinbaum wrote.  

Economic and Political Implications

Mexico's peso strengthened nearly 1 per cent against the US dollar in after-hours trading on Wednesday, recovering from earlier losses. Analysts viewed Trump’s tariff proposal more as a negotiating tactic than a firm trade policy.  

David Kohl, chief economist at Julius Baer, said, "The lack of a clear link between this threat and trade questions suggests Trump is using tariffs as a broader negotiation tool."  

The USMCA, which governs trade between the US, Mexico, and Canada, is up for review in 2026. Katia Goya, an economist at Grupo Financiero Banorte, predicted that the three nations would renegotiate key terms rather than renew the deal unchanged.  

Ebrard underlined the importance of maintaining strong regional ties, noting that trade under the USMCA reached $1.78 trillion in the first nine months of the year. "Mexico does not want conflicts and divisions, but to build a stronger region," he said.

Trump’s team defended the tariffs as a measure to protect US workers and businesses, but with economic stakes high on both sides, the stage is set for a challenging phase in US-Mexico relations.  

(With Reuters inputs)