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By Shane Croucher
Senior Editor
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Mexico's President Claudia Sheinbaum said in an address that she would respond to new U.S. tariffs with her own "tariff and non-tariff measures" on Sunday, March 9, according to comments reported by local media.
What to Know
U.S. President Donald Trump imposed on March 4 a 25 percent tariff on Mexican and Canadian imports and also raised tariffs to 20 percent on China. Trump had threatened tariffs over problems with the border, such as the trafficking of drugs like fentanyl.
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Sheinbaum called on Mexicans to gather in Mexico City's Zócalo—its main square—at noon that day so she can "share with them the actions that we will undertake and together face this challenge," Mexican newspaper Reforma reported.
The Mexican president said the "damage" tariffs will cause affects both Mexicans and Americans, and will result in higher prices and fewer jobs. "No one wins with this decision," Sheinbaum reportedly said.
While Mexico is delaying its response for a few days, Canada and China retaliated with their own immediate tariffs. China also put new export and investment restrictions on 25 American firms.
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Why it Matters
Trump sees tariffs as a useful tool for pursuing key parts of his agenda. He wants to pressure America's immediate neighbors Canada and Mexico to do more to tighten their borders and stop the trafficking of illicit drugs and undocumented migrants.
The American president is also using tariffs to force better trade terms with other countries or, if they are not willing to improve access for American firms, protect domestic companies from global competition instead.
Mexico and Canada are the two largest trading partners of the U.S. Census Bureau data shows U.S. trade volume in goods with Mexico and Canada was worth $1.57 trillion combined in 2023.
Sheinbaum emphasized that these measures were not intended to "initiate an economic or commercial confrontation," which "is the opposite of what we should be doing," and urged greater economic integration in their region to stay competitive globally.
What People Are Saying
Mexican President Claudia Sheinbaum said, per newspaper Milenio: "We will always seek a negotiated solution, as we have proposed within the framework of respect for our sovereignty, but the unilateral decision made by the United States affects national and foreign companies operating in our country and affects our peoples. That is why we have decided to respond with tariff and non-tariff measures that I will announce in the public square next Sunday."
U.S. President Donald Trump said in remarks at the White House: "I would just say this to people in Canada or Mexico, if they're going to build car plants, the people that are doing them are much better off building here, because we have the market. We're the market where they sell the most."
Canadian Prime Minister Justin Trudeau said in a statement: "Because of the tariffs imposed by the U.S., Americans will pay more for groceries, gas, and cars, and potentially lose thousands of jobs. Tariffs will disrupt an incredibly successful trading relationship."
Jason DeVito, Senior Portfolio Manager for Emerging Market Debt at Federated Hermes, said: "We don't believe aggressive tariffs on Mexico will remain in place for long given the substantial inflationary impact it would have on U.S. economy. However, we do expect some form of tariffs to be levied, but not 25 percent persisting.
"Twenty-five percent tariffs, if persistent would almost invariably shock the Mexican economy into recession, in my view. External buffers in Mexico are strong and debt-to-GDP ratio is moderate. We expect limited default risk, but the next 12 months may be an economic malaise."
What Happens Next
Sheinbaum will reveal the nature of Mexico's tariff and non-tariff measures against the U.S. on Sunday.
The economic impacts of the burgeoning trade war will be seen in data such as GDP, employment, and inflation figures over the coming months.
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