Mexico To Reply To US Import Tariffs, President Sheinbaum: No Reason Or Justification

Mexican President Claudia Sheinbaum. (Wikimedia Commons/Eneas De Troya)

JAKARTA - Mexican President Claudia Sheinbaum on Tuesday criticized the 25 percent import rate set by United States President Donald Trump over goods from Mexico, saying his government would respond with its own actions.

President Trump's comprehensive tariff, which comes into effect Tuesday, marks a turning point in more than 30 years of economic integration between Mexico and the US and could have a major impact on Latin America's second-largest economy.

"There is no reason, the basis of thought, or justification to support this decision that will affect the people and our country. No one will win," President Sheinbaum told a news conference.

Mexico and the United States are major trading partners with each other, with key industries such as the automotive sector benefiting from cross-border movement facilitated by their trilateral trade agreement which also includes Canada.

President Sheinbaum said he would provide details on Mexico's response, including retaliatory rates, at an event in the iconic square of the capital Zocalo on Sunday.

Mexican president added he would speak with President Trump this week, "perhaps on Thursday."

While President Sheinbaum acknowledged the importance of integration of Mexico's economy with the US, he also defended Mexico's economic power, highlighting "historic" work and minimum wage figures as well as well developed social safety nets.

To deal with tariff-related turbulence, President Sheinbaum proposed cutting Mexico's imports and making some products locally, part of a broader "Mexico Plan" economic framework than its government, while also sending exports such as Mexican avocados elsewhere.

Moody's Alfredo Coutino estimates the tariff will bring Mexico into a recession, with the economy shrinking by about 0.8 percent.

US consumers and businesses will suffer an increase in the price of imported products from Mexico, said President Sheinbaum, with the auto industry facing the "largest problem" as auto parts can cross borders several times as cars are assembled.

Analysts estimate the tariff could increase an additional billion dollars for automakers building their vehicles overall or partly in Mexico, with President Sheinbaum saying General Motors, headquartered in Detroit, as one of the most likely automakers.

Mexican leaders called the tariff a blatant violation of the US-Canada-Mexico free trade agreement, which was negotiated during President Trump's first term of office, warning that legal action could be taken.

It is known, after delaying his decision for a month, President Trump on Monday said import rates would come into effect as Mexico, along with Canada and China, failed to take sufficient action to stem the flow of lethal fentanyl opioids and their precursor chemicals to the US.

President Sheinbaum said Mexico had taken "firm action" during a 30-day hiatus to reduce the number of fentanyl entering the United States.

In recent weeks, Mexico has deployed thousands of troops to vulnerable areas along its border with the US and extradited nearly 30 inmates and others accused of links to violent drug cartels.