Mexico Weighs Risks From Trump’s New Across-the-Board Tariff and Looks for Clear Rules in Washington
Mexico is choosing caution as the United States reshapes its tariff policy and it becomes clearer whether the USMCA will, in practice, remain protected.
The Mexican government is bracing for a new bout of trade uncertainty with the United States after President Donald Trump announced a 10% across-the-board tariff to replace earlier measures that were narrowed after a court setback. The Ministry of Economy, led by Marcelo Ebrard, said Mexico’s response will be prudent until the “fine print” of the plan is known: which products it will cover, the legal basis it will rely on, and—most importantly—whether it will include exemptions tied to the USMCA.
Ebrard said President Claudia Sheinbaum’s administration will pursue a “cool-headed” strategy and a technical assessment before deciding on any actions. The reason is straightforward: bilateral trade is deeply integrated, and any change—even a temporary one—can ripple through costs, prices, and investment decisions. The minister noted that most Mexican exports currently enter the U.S. market tariff-free thanks to the agreement, while existing duties in industries such as steel, aluminum, and vehicles have been tied to other legal channels, such as Section 232, which has historically allowed greater flexibility under national security arguments.
In the coming days, the Mexican government will seek clarity on the new tariff design and its scope. Ebrard expects to travel to the United States to meet with counterparts and defend the continuation of preferential treatment for Mexico. Within Mexico’s economic team, the immediate goal is to determine whether the across-the-board tariff is intended as a broad instrument that could reach goods receiving preferential treatment, or whether it is a more limited umbrella aimed at goods outside the agreement’s framework or at specific countries.
The episode comes at a time when Mexico depends on stable access to the U.S. market to sustain export momentum, one of the main engines of the economy. With moderate growth and investment showing mixed signals in recent months, tariff announcements raise “event risk” for sectors already operating with high financing costs and squeezed margins. In addition, political and trade volatility tends to show up in the exchange rate, in appetite for Mexican assets, and in decisions around relocating supply chains linked to nearshoring.
Implications for Exports, Investment, and the Exchange Rate
If the 10% tariff were effectively applied to goods that currently enter duty-free under the USMCA, the hit would be immediate for highly integrated industries such as auto parts, electronics, agribusiness, and intermediate manufactured goods that cross the border multiple times before becoming a final product. In that scenario, the cost would not fall solely on Mexican exporters: some would be passed on to U.S. importers and consumers, and another portion would be absorbed along the supply chain through discounts, inventory adjustments, or partial reshoring/relocation of processes. For Mexico, the biggest risk would be a slowdown in new investment in export-oriented plants—at a time when competition to attract productive capital is intensifying across North America.
On the financial side, periods of trade tension often show up as greater volatility in the peso versus the USD, particularly if markets interpret the situation as a deterioration in rule certainty. Banxico, for its part, would face a more complicated environment: any sharp depreciation could feed into inflation expectations via prices of imported goods or dollar-priced inputs, even though exchange-rate pass-through has been lower than in past decades. At the same time, companies exposed to foreign trade could increase hedging, raising operating costs in the short term.
Beyond the immediate impact, the outcome will hinge on two factors: the tariff’s legal design and the political room to build exemptions and enforcement mechanisms compatible with the USMCA. In practice, Mexico will seek to preserve the agreement’s central premise: predictability for goods that meet rules of origin and for regional supply chains that have been at the core of North American trade.
For now, Mexico’s reaction prioritizes analysis and direct negotiation. The government is betting that productive integration and Mexico’s weight as a U.S. trading partner will serve as an anchor to avoid broad disruptions. Still, the episode confirms that the main risk to Mexico’s export-driven economy does not come only from demand, but from regulatory uncertainty that can change costs from one day to the next.
In a broader view, the case underscores the importance of diversifying markets and strengthening domestic competitiveness—logistics, energy, security, and the rule of law—so the country does not depend exclusively on political stability in Washington. For now, the official message is clear: wait for details, defend preferential treatment, and calibrate a proportional response once the rules are known.
