Mexico Retaliates with Tariffs After U.S. Trade War Escalation

Mexican President Claudia Sheinbaum announced retaliatory tariffs after the U.S. imposed a 25% tariff on all Mexican imports, escalating tensions between the two nations. Sheinbaum emphasized Mexico's preference for dialogue but said the country was forced to act in defense of its economic interests.

She instructed Economy Minister Marcelo Ebrard to implement "Plan B," which includes tariff and non-tariff measures targeting U.S. imports. Sources indicate Mexico may impose 5%-20% tariffs on American pork, cheese, fresh produce, steel, and aluminum, while initially exempting the auto industry.

Ebrard condemned the U.S. tariffs as a violation of the U.S.-Mexico-Canada Agreement (USMCA), vowing that Mexico would prevail in the dispute. The U.S. is Mexico’s largest trade partner, with exports to Mexico exceeding $322 billion in 2023, while imports from Mexico totaled over $475 billion. Experts warn that Mexico’s GDP could shrink by 4% in 2025 if the tariffs remain in place.

The U.S. justified the tariffs by citing Mexico’s alleged failure to curb fentanyl trafficking and illegal migration. Sheinbaum rejected these claims, highlighting her administration’s efforts, including the seizure of 20 million fentanyl doses and the arrest of over 10,000 individuals linked to drug trafficking.

Mexico’s ruling party leader Ricardo Monreal called the tariffs one of the most significant economic attacks in the country's history. With nearly a third of Mexico’s GDP tied to U.S. exports, the trade war threatens economic stability for both nations.

As tensions rise, businesses on both sides of the border brace for economic fallout, while Mexico pushes for a resolution that protects its economy and trade partnerships.