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-Mexico and Canada are considering trade retaliation after new U.S. tariffs.
The recent imposition of tariffs by President Donald Trump has raised alarms in Mexico and Canada, as this decision could trigger a commercial war with negative effects for the region, warned TLC Asociados CEO, Daniella Martínez.
She commented that both governments are evaluating potential retaliatory measures in response to what they consider a violation of the United States-Mexico-Canada Agreement (USMCA), as the 25% tariffs on Mexican and Canadian products, along with an additional 10% on Chinese imports, threaten North America’s commercial stability.
“These taxes represent a direct blow to strategic sectors such as the automotive industry, manufacturing, and agriculture. Companies face increased product costs and reduced competitiveness,” she stated.
Mexico, which sends 83% of its exports to the U.S., is one of the most affected countries, meaning businesses with interconnected supply chains in the region will experience higher operational costs, potentially leading to layoffs and a reduction in investments.
On the other hand, she noted that the negative effects will also be felt in the U.S., as industries dependent on Mexican inputs, such as automotive and manufacturing, will face higher production costs, which could lead to price increases for consumers.
“These tariffs not only affect Mexico and Canada but will also impact the wallets of U.S. citizens. Furthermore, there is a risk that foreign companies may reconsider their investment plans in the U.S. due to the trade uncertainty,” she affirmed.
Daniella Martínez pointed out that the governments of Mexico and Canada have expressed their opposition to these measures and have begun to explore legal mechanisms within the USMCA to challenge the decision.
If the U.S. does not back down, both countries could impose tariffs in response, potentially affecting key exports such as U.S. agricultural products, she warned.
The CEO of TLC Asociados emphasized that the imposition of trade barriers contradicts the principles of the USMCA and could lead Mexico and Canada to diversify their trade partners, reducing their reliance on the United States.
In this regard, she assured that this situation opens the door for Mexico to strengthen its trade with Asia and Europe, which could disrupt the commercial balance in the region,” the specialist commented.
If the tariffs remain in place, the outlook for 2025 looks complicated, as some analysts estimate that Mexico’s GDP could fall by up to 4% if the trade war persists. While the depreciation of the peso could partially offset the impact, the risk of investment flight and a deterioration of the labor market remains, concluded Daniella Martínez.