While many around the world reacted with shock to President Donald Trump’s recent tariff announcement on “Liberation Day,” Mexico’s government found a reason to celebrate. President Claudia Sheinbaum expressed optimism about the situation, noting that Mexico and Canada, under the USMCA free trade agreement, would not face any new tariffs. Meanwhile, the average tariff on U.S. imports is set to rise dramatically from two percent to 29 percent.
Although Mexico still faces a 25 percent tariff on steel and automotive exports to the U.S., it remains exempt from tariffs on USMCA-compliant exports. With direct access to the largest import market in the world, a cost-effective labor force, and favorable trade conditions, Sheinbaum believes Mexico is poised to benefit significantly from the new U.S. tariff landscape.
Marcelo Ebrard, Mexico’s economy minister, highlighted that the USMCA is the only free trade agreement that has avoided tariffs in Trump’s announcement. He emphasized the importance of Mexico having a preferential treaty, which allows Mexican exports to be more competitive than those from other countries. Ebrard pointed to a map showing the global impact of the tariffs, with Mexico and Canada standing out in contrast to the rest of the world.
Sheinbaum credited the positive outcome to the strong relationship her government has fostered with the U.S. administration. She pointed out that Mexico’s decision not to impose retaliatory tariffs after the U.S. imposed a 25 percent tariff on Mexican steel and automotive products helped avoid further economic penalties.
In addition to trade, Sheinbaum’s administration has cooperated closely with the U.S. on immigration and drug trafficking issues. This includes deploying 10,000 troops to secure the border, intercepting fentanyl shipments, and extraditing cartel leaders to face charges in the U.S.
As Mexico stands to gain from the new economic order, it has become the second-largest import market for the U.S., following China. With significant tariffs now imposed on China and other major trade partners, Mexico could see a surge in foreign investment, especially from businesses looking to shift their supply chains away from China.
Looking ahead, Ebrard plans to travel to Washington next week to discuss negotiations aimed at reducing tariffs on Mexican-assembled vehicles, which could include accounting for U.S.-made parts. Sheinbaum is also hopeful about persuading Trump to lower tariffs on Mexican steel and aluminum.
As the world adjusts to this new economic reality, reactions vary widely. Economists express concerns, U.S. stock markets are seeing declines, and foreign leaders are scrambling to secure favorable trade agreements. However, for Mexico, the outlook appears promising, with opportunities for industrial investment on the horizon.