The global economic landscape is currently witnessing a significant shift, particularly concerning trade relations between the United States, Mexico, and other major economic players. Amidst rising protectionist sentiments and the implementation of new tariff policies by the U.S., the United States-Mexico-Canada Agreement (TMEC) is emerging as both a shield and a challenge for Mexico's economic stability and growth.
Trump's Tariff Measures and Mexico's Position
Donald Trump's recent announcement of imposing a minimum 10% tariff on almost all imports to the U.S. is sending ripples across global markets. According to Suárez (2025), this move disproportionately affects Asian countries, including Vietnam, Thailand, China, and Japan, which face higher tax burdens due to significant trade deficits with the U.S. However, Mexico and Canada, as TMEC partners, have been granted partial exemptions. This preferential treatment allows Mexico to navigate the tariff storm to some extent, but it is not entirely immune to the financial impact.
Despite the TMEC, Mexico still faces a 25% tariff on exports that do not meet the agreement's standards. Additionally, existing tariffs on Mexican steel and aluminum, coupled with a new 25% levy on vehicles not manufactured in the U.S., add complexity to the trade scenario. According to Banco Base analysis, only 49% of Mexican exports are protected by TMEC (Suárez, 2025).
TMEC as a Double-Edged Sword
The TMEC, which was designed to foster trade and economic integration, is now at the center of a contentious debate. While it has facilitated Mexico becoming the primary importer for the U.S., with annual shipments exceeding $505 billion, it has also drawn criticism. Trump views the TMEC as a «disaster» responsible for the closure of numerous plants in the U.S. «El TMEC fue un desastre, vamos a necesitar el apoyo del Congreso para acabar con ese acuerdo que es el peor de nuestra historia» (Trump, 2025, as cited in Suárez, 2025).
However, according to Ignacio Martínez, coordinator of the Laboratory of Commerce, Economy and Business of UNAM, the trade dynamics are nuanced due to the strong intra-firm relationships between U.S. companies in Mexico. This has led the U.S. government to moderate its tariff strategies to avoid harming its own business interests.
Opportunities and Challenges for Mexico
Gabriela Siller, director of Banco Base, suggests that the high tariffs imposed on other economies could offer Mexico a unique opportunity to increase its market share. «Así como México ganó participación de mercado en el primer mandato de Trump por la guerra comercial con China, ahora podría ganar participación de mercado ante la guerra arancelaria de Trump con el mundo» (Siller, 2025, as cited in Suárez, 2025). Success will depend on how quickly Mexican companies can adapt to TMEC criteria and the outcomes of any renegotiations of the trade agreement.
- Opportunity: Increased market share due to tariffs on other economies.
- Challenge: Adapting to TMEC criteria and potential renegotiations.
Beyond Trade: Political Leverage and Domestic Efforts
Trump has also used tariffs to pressure Mexico and Canada to enhance their efforts in combating drug trafficking and illegal immigration. The general 25% tariff on imports outside the TMEC was, from Washington’s perspective, a response to the perceived slow progress in these areas. In response, the Mexican government has intensified its actions, including deploying thousands of agents to the border and extraditing high-profile drug lords to the U.S.
Sheinbaum's Defense of TMEC
President Claudia Sheinbaum has consistently defended the TMEC and the importance of North American trade integration. «Desde las primeras señales de amagos arancelarios de Trump, la presidenta Claudia Sheinbaum defendió el TMEC y la integración comercial de Norteamérica» (Suárez, 2025). Sheinbaum views the agreement as crucial for Mexico's economic stability and has actively worked to maintain and strengthen trade relations with the U.S. and Canada.
Economic Forecasts and Market Reactions
Despite the ongoing trade tensions, Moody’s Analytics maintains a cautious outlook for Mexico's GDP growth, projecting 0.2% for 2025 and 1.5% for 2026. According to Alfredo Coutiño, director for América Latina de Moody’s Analytics, the trade threat to Mexico is not entirely resolved. «El país solo se libró de la lista de hoy, pero no de la incertidumbre y angustia que produce la espera» (Coutiño, 2025, as cited in Suárez, 2025).
The initial concession to Mexico regarding tariffs led to an appreciation of the peso, which closed up 0.80% at around 20.19 pesos per dollar. However, the broader implications of Trump's tariff policies pose recession risks for the U.S., while potentially opening new opportunities for Mexico to improve its position in the international market.
Conclusion
In conclusion, the TMEC represents a complex interplay of opportunities and challenges for Mexico in the face of rising protectionism. While it provides a degree of insulation from widespread tariffs, Mexico must adapt swiftly to meet the agreement’s standards and address ongoing demands related to trade imbalances, drug trafficking, and immigration. According to Karina Suárez (2025), the future remains uncertain. The government is focusing on these key challenges in order to ensure sustainable economic growth and stability.
