Mexico’s president and finance minister have given a clear picture of how their government will respond to US President-elect Donald Trump. provided tariffs in the country, which their government has warned will cost 400,000 US jobs.
Speaking at a press conference on Wednesday, Mexican President Claudia Sheinbaum said Mexico’s response could be swift if Trump follows through on his plans.
“If there are U.S. tariffs, Mexico will raise tariffs as well,” Sheinbaum said.
The comments were the latest response from Trump words Monday that they want to impose high tariffs not only on China, but also on Canada and Mexico, at a higher rate of 25%.
Finance Minister Marcelo Ebrard also warned against Trump starting a regional trade war, calling the cost to US workers “huge”.
“Approximately 400,000 jobs will be lost” in the US, he said, pointing to a study based on the statistics of US car manufacturers that manufacture in Mexico.
He said this could extend from workers to US consumers. For example, Ebrard said, most pickup trucks sold in the U.S. are made in Mexico. He said Trump’s tariffs would add $3,000 to the cost of a new car.
“That’s why we say it will be shot in the foot,” he said.
‘Unacceptable’
Trump is he promised using tariffs to prop up the US manufacturing industry – an attempt at radical reform that economists are skeptical of.
However, the dangers of the president-elect’s approach to Canada and Mexico, which together with China make up the top three US trade partners, surprised him.
In a statement on Monday, Trump said he would impose tariffs of 25 percent if the three countries did not do more to combat illegal immigration and drug smuggling into the US.
Sheinbaum previously called the threats “unacceptable”.
On Wednesday, Sheinbaum revealed that she had a phone call with Trump to discuss immigration to the US-Mexico border, where she tried to allay her fears.
“I had a good conversation with President Donald Trump,” Sheinbaum said has been sent on social media. “We discussed Mexico’s approach to immigration, and I shared that travelers are not reaching the northern border because they are being taken care of in Mexico.”
Officials have also warned that Trump’s tariffs could undermine the free trade agreement between the US, Mexico and Canada, the USMCA, which restricts most trade between the three countries.
Trump himself discussed the deal during his first term, complaining that US businesses were getting the deal.
Sheinbaum has requested a meeting with Trump before taking office on January 20.
For his part, Canadian Prime Minister Justin Trudeau said he had already spoken to Trump about the tariff threat, emphasizing the existing relationship between the two countries.
“We talked about some problems that we can overcome. It was a good call,” he said. “This is a relationship that we know needs a lot of effort, and that’s what we’re going to do.”
Government officials are not the only ones who have warned about the impact of the proposed tariffs on US companies and consumers.
Analysts at Barclays have said they estimate the prices being offered “could wipe out all profits” from the “Detroit Three” automakers: GM, Stellantis and Ford.
“While it is understood that a 25% tariff on any auto or product from Mexico or Canada would be disruptive, investors do not appreciate how disruptive this would be,” he wrote in a note on Tuesday.
Trump’s team, for its part, has been defiant.
Brian Hughes, a spokesman for Trump’s transition team, told the Reuters news agency that the tariffs would protect US manufacturers and workers from “misconduct by foreign companies and foreign markets”.
He also said that Trump will follow policies that he says will make life easier and more prosperous in the US.
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