Author: Simon Romero
Published on: 02/02/2025 | 00:00:00
AI Summary:
Mexican Sectors Most Affected by U.S. Tariffs and How the Country Could Respond President Trump’s tariff orders. The Trump administration’s move to impose tariffs on Mexico sent shock waves across the country of 130 million people on Sunday. But Mexico has yet to provide specifics on how it plans to hit back. Mexico's reliance on the United States has actually increased in recent years. But other parts of the economy, like automobile manufacturing or energy, expose the country's deep vulnerabilities to Mr. Trump’s heavy-handed tactics. The authorities could allow the country’s currency, the peso, to weaken against the dollar, effectively making its exports more competitive. Ms. Sheinbaum says she is preparing to announce retaliatory measures on Monday. Agriculture Mexican farmers could come under intense pressure if tariff dispute intensifies. Canada, which Mr. Trump also hit with 25 percent tariffs, has already announced retrial levies on selected U.S. Goods. Mexico, Canada and the United States renegotiated the trade treaty. The fate of that treaty, known as the U.S.M.C.A., is now up in the air. But experts say Mexico could also have the potential to pivot, albeit slowly, to other markets. About 27 percent of Nissan’s sales in the United States were sourced from Mexico in 2024. Stellantis sourced 23 percent and General Motors 22 percent, according to a report by S&P Global. Mexico appears to have relatively little leverage to respond with measures targeting U.S. Car manufacturers. That reliance could prevent Mexico from placing its own tariffs on imported U.S. Energy. Mexico also exports roughly 700,000 barrels of crude oil a day to the United States. In turn, Mexico also imports large amounts of refined fuels like gasoline and diesel. China's Difficult Spot: Is it better to ignore them or retaliate? Doing little runs the risk of looking weak in the eyes of the Chinese people.
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