The China Mail - Trump tariffs on Mexico: the good, the bad, the unknown

USD -
AED 3.672501
AFN 66.240603
ALL 83.177072
AMD 382.120536
ANG 1.790055
AOA 916.999657
ARS 1406.024298
AUD 1.5311
AWG 1.8
AZN 1.698478
BAM 1.682293
BBD 2.013023
BDT 122.133531
BGN 1.68091
BHD 0.377076
BIF 2949.904523
BMD 1
BND 1.30133
BOB 6.906191
BRL 5.288986
BSD 0.999415
BTN 88.626159
BWP 14.228698
BYN 3.409228
BYR 19600
BZD 2.010098
CAD 1.40289
CDF 2137.510825
CHF 0.792404
CLF 0.023765
CLP 932.280175
CNY 7.11275
CNH 7.09747
COP 3763.8
CRC 500.954773
CUC 1
CUP 26.5
CVE 94.845086
CZK 20.825999
DJF 177.974849
DKK 6.42812
DOP 64.374065
DZD 130.133521
EGP 47.198502
ERN 15
ETB 154.851967
EUR 0.86078
FJD 2.27535
FKP 0.757017
GBP 0.76063
GEL 2.702208
GGP 0.757017
GHS 10.942163
GIP 0.757017
GMD 72.999677
GNF 8675.532006
GTQ 7.660548
GYD 209.038916
HKD 7.771365
HNL 26.293244
HRK 6.484697
HTG 130.932925
HUF 331.4225
IDR 16723.25
ILS 3.229575
IMP 0.757017
INR 88.691503
IQD 1309.32925
IRR 42112.502587
ISK 126.709866
JEP 0.757017
JMD 160.523667
JOD 0.708999
JPY 154.371502
KES 129.249793
KGS 87.450205
KHR 4008.600301
KMF 425.000207
KPW 900.02171
KRW 1452.589763
KWD 0.30659
KYD 0.832889
KZT 523.891035
LAK 21687.96986
LBP 89501.453663
LKR 306.559549
LRD 181.398269
LSL 17.1411
LTL 2.95274
LVL 0.60489
LYD 5.452575
MAD 9.241164
MDL 16.871097
MGA 4468.509694
MKD 52.917244
MMK 2099.568332
MNT 3578.06314
MOP 8.000774
MRU 39.575771
MUR 45.650112
MVR 15.40503
MWK 1733.042027
MXN 18.34866
MYR 4.132498
MZN 63.960137
NAD 17.1411
NGN 1441.890154
NIO 36.780265
NOK 10.080255
NPR 141.801854
NZD 1.760205
OMR 0.384511
PAB 0.999415
PEN 3.370349
PGK 4.225982
PHP 59.00804
PKR 282.521891
PLN 3.637201
PYG 7042.096028
QAR 3.643135
RON 4.377298
RSD 100.870996
RUB 80.891687
RWF 1452.717232
SAR 3.749984
SBD 8.237372
SCR 13.656496
SDG 601.497242
SEK 9.44298
SGD 1.29873
SHP 0.750259
SLE 23.374976
SLL 20969.498139
SOS 570.19732
SRD 38.589499
STD 20697.981008
STN 21.073819
SVC 8.745205
SYP 11058.869089
SZL 17.134452
THB 32.4305
TJS 9.225
TMT 3.5
TND 2.938809
TOP 2.40776
TRY 42.330005
TTD 6.777226
TWD 30.733982
TZS 2439.999946
UAH 42.001858
UGX 3567.926508
UYU 39.765005
UZS 12032.720329
VES 233.26555
VND 26350
VUV 121.860911
WST 2.809778
XAF 564.142765
XAG 0.019592
XAU 0.000245
XCD 2.70255
XCG 1.801252
XDR 0.704774
XOF 564.230111
XPF 102.582188
YER 238.496025
ZAR 17.112702
ZMK 9001.194587
ZMW 22.46297
ZWL 321.999592
  • RBGPF

    -2.8200

    75.65

    -3.73%

  • CMSC

    0.0700

    23.9

    +0.29%

  • NGG

    -0.4650

    77.625

    -0.6%

  • SCS

    -0.0100

    15.61

    -0.06%

  • RYCEF

    -0.4100

    14.59

    -2.81%

  • GSK

    -0.3879

    47.335

    -0.82%

  • RIO

    -0.3450

    70.695

    -0.49%

  • AZN

    0.7500

    89.36

    +0.84%

  • CMSD

    0.1572

    24

    +0.65%

  • BCE

    -0.2850

    22.825

    -1.25%

  • RELX

    -0.1150

    41.305

    -0.28%

  • BCC

    0.1350

    69.315

    +0.19%

  • BTI

    -0.5250

    53.955

    -0.97%

  • JRI

    0.0535

    13.69

    +0.39%

  • BP

    0.4992

    36.49

    +1.37%

  • VOD

    -0.0900

    12.32

    -0.73%

Trump tariffs on Mexico: the good, the bad, the unknown
Trump tariffs on Mexico: the good, the bad, the unknown / Photo: © AFP

Trump tariffs on Mexico: the good, the bad, the unknown

At first glance, Mexico got off lightly from Donald Trump's "Liberation Day" tariffs blitz.

Text size:

The US president has repeatedly threatened the United States' top trading partner with punishing tariffs over illegal migration and drug smuggling.

So it was a surprise when he left Mexico off the list of nations on which he imposed levies ranging from 10 to 50 percent.

The relief in Mexico, which has a free-trade deal with the United States and Canada, was tempered by concern over the 25-percent levies Trump slapped on foreign-made imported vehicles.

That includes some of the three million vehicles the Latin American country sends north across the border each year.

AFP looks at how Mexico, whose President Claudia Sheinbaum has been walking a diplomatic tightrope with Trump, fared generally:

- The good -

Mexico avoided the 10-percent blanket tariffs imposed by Trump on several Latin American countries, including ones with staunchly pro-Trump governments such as Argentina and El Salvador.

For the moment at least, some Mexican exports to the United States remain tariff-free.

Analysts at BBVA bank said the fact that Mexico faced a lower level of relative protectionism "could give it advantages in accessing the US market and, therefore, attracting investment."

They said it could act as an incentive for nearshoring -- companies moving their operations to Mexico from other countries to use it as a tariff-free or low-tariff port of entry to the United States.

"It would simply be more profitable or less expensive to export these goods from Mexico than from countries with higher tariffs," BBVA said.

During Trump's first presidency from 2017-2021, scores of Chinese companies relocated their production to northern Mexico to avoid tariffs -- a bone of contention for the Republican leader.

- The bad -

Parts of Mexico's vital automotive industry are reeling after being hit with 25 percent tariffs, which come a month after Trump imposed levies on other goods from Mexico and Canada not covered by the United States-Mexico-Canada-Agreement (USMCA) trade deal.

Mexico's steel and aluminum exports to the United States have, since March, also been subject to 25 percent tariffs.

"We shouldn't be subject to these tariffs simply because the USMCA agreement provides otherwise," Juan Francisco Torres-Landa, a partner at consulting firm Hogan Lovells in Mexico City, told AFP.

The automotive tariffs are particularly painful for Mexico.

In recent years, several major automakers including Ford, General Motors, BMW, and Audi have outsourced part of their production to Mexico because of its tariff-free access to the United States.

Under Trump's new rules, US vehicle parts will not face tariffs. But manufacturers say that with automotive components crossing the US-Mexico border multiple times during the assembly process, it is nearly impossible to ascertain which are American.

Torres-Landa called the provision "gibberish."

"A car must have about 10,000 parts; tracking them to see what you pay (tariffs) for and what you don't pay for is a very complex equation," he said.

A day after the tariffs were announced, the shockwaves are still being felt.

Stellantis (born out of the merger of Fiat Chrysler and Renault) said it would immediately pause production at some of its Mexican and Canadian plants.

Volkswagen, meanwhile, indicated it would halt rail shipments of vehicles made in Mexico to the United States, Automotive News said.

The Mexican government said Thursday that over the next 40 days it will attempt to negotiate "the best conditions" with the Trump administration for the automotive, steel, and aluminum industries.

- The unknown -

The uncertainty caused by Trump's repeated threats of steep tariffs has already caused a slowdown in manufacturing activity.

While the Mexican government has forecast economic growth of about 1.5 percent this year, analysts surveyed by the central bank said this week they expected it to come in much lower, at 0.5 percent.

In the country's northern industrial borderlands, home to thousands of factories built to serve the US market, Mexicans fear mass layoffs.

"I think difficult times are coming," trucker Omar Zepeda told AFP in the border city of Tijuana this week.

N.Wan--ThChM