What Mexico is doing to placate Trump as tariffs loom
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- President Trump says taxes on goods produced in Mexico and Canada will go into effect on Tuesday.
- Mexican President Claudia Sheinbaum is trying to persuade Trump to hold off on the tariff threat.
- Mexico sends more than 80% of its exports to the United States, so it will be hit hard if tariffs take effect.
MEXICO CITY — Facing a Tuesday deadline, the government of Mexican President Claudia Sheinbaum is once again mounting a full-court press to dissuade President Trump from implementing potentially devastating tariffs on Mexican exports to the United States.
This week, she delivered a symbolic gift: the transfer to the United States of 29 drug trafficking suspects, including Rafael Caro Quintero, the legendary co-founder of the once-dominant Guadalajara cartel and alleged mastermind of the 1985 slaying of Enrique Camarena, an undercover U.S. Drug Enforcement Administration agent in Mexico.
Also flown to the United States in a dramatic illustration of binational security collaboration were alleged drug lords affiliated with some of the six Mexican organized crime groups that Trump’s White House branded “foreign terrorist organizations.”
The Trump administration wants to use the military to fight Mexican drug cartels.
Behind closed doors in Washington, several of Sheinbaum’s Cabinet ministers engaged in a different form of diplomacy, seeking to persuade their U.S. counterparts to stave off Trump’s plan for a 25% across-the-board tariff on goods from Mexico and Canada. Sheinbaum, meanwhile, said she was hoping to speak directly to the mercurial U.S. president.
“As you know, he has his way of communicating,” Sheinbaum said Thursday with a smile. “But, as we always say: It takes a cool head and optimism to reach an accord.”
Trump first threatened to impose tariffs on Feb. 4, but last-minute agreements delayed them a month. On Wednesday, Trump seemed to say that the tariffs would be deferred again — until April. But in a social media post Thursday, Trump again reversed course, saying they would go into effect on March 4.
Sheinbaum, who took office on Oct. 1, has been praised at home for handling Trump’s tariff threats with equanimity while not compromising Mexican sovereignty or alienating her nationalist base. A recent poll showed her with an 80% approval rating.
Mexican President Claudia Sheinbaum has won praise for how she deals with Trump. How long can her success last?
“Instead of responding to everything he says, she is trying to demonstrate what Mexico has been doing on the security and migration front and also how important Mexico is to U.S. competitiveness,” said Pamela K. Starr, a professor of international relations at USC.
“She’s trying to convince Trump that tariffs don’t make sense,” Starr added, “because the competitiveness of U.S. companies depends on Mexico, and the ability of the U.S. to bring more production home depends on its ability to work well with Mexico.”
The tariffs would likely trigger retaliatory duties from both nations and could send Mexico’s already shaky economy into a recession, experts say. The Bank of Mexico expects the country’s economy to grow by just 0.6% this year.
Trump’s wide-ranging tariff blueprint has triggered global uncertainty. But few countries stand to lose more than Mexico, which sends more than 80% of its exports to the United States.
Already, foreign direct investment in Mexico has plummeted as investors face the uncertainty of tariffs.
Ed Lebow, a trade attorney at the U.S.-based firm Haynes and Boone, said companies that do business with Mexico are deeply anxious.
Recently, representatives of a company that manufactures goods there asked Lebow whether they could avoid tariffs by routing their products to Guatemala before sending them to the U.S. market. Lebow had to tell the company no — tariffs depend on where products are assembled, not where they are shipped from.
“People are grasping at anything,” Lebow said of worried business executives. “With Trump, one never knows if this is more brinkmanship, which is a standard technique in negotiation, or whether it actually represents a sincere belief that if he does not get the response needed on fentanyl, it’s worth disrupting the entire North American economy.”
In early February, Makoto Uchida, chief executive of Nissan, sent shock waves through Mexico when he suggested the Japanese automaker may be forced to move production elsewhere if Trump follows through on his tariff plan.
In recent months, Sheinbaum has heavily promoted a crackdown on the country’s illicit drug trade, citing high numbers of arrests of suspected traffickers and seizures of fentanyl and other illegal substances.
Thursday’s transfer of 29 prisoners, was the latest in a series of turnovers of alleged traffickers in a nation where organized crime controls vast swaths of territory and dominates cross-border smuggling. According to the Justice Department, as many as six of the 29 fugitives, including Quintero, could now face the death penalty — which they would not have faced in Mexico.
As the tariff deadline nears, Mexican officials are hopeful for the kind of 11th-hour reprieve that in early February prompted Trump to put off the levies for a month. On that occasion, Sheinbaum spoke with Trump via telephone for 45 minutes and touted Mexico’s progress in deterring U.S.-bound migrants and drugs.
But on Thursday, in his post saying the tariffs would proceed, Trump cited the “very high and unacceptable” levels of drugs — especially fentanyl — “pouring into our country” from Mexico and Canada, and produced with precursor chemicals from China.
U.S. officials blame fentanyl, primarily smuggled from Mexico, for tens of thousands of overdose deaths in recent years.
Somewhat surprisingly, Trump’s Thursday post made no mention of illegal immigration — which, along with drug smuggling, Trump has long cited as his rationale for imposing sanctions on Mexico and Canada.
The 1,500 migrants living in this Mexico City encampment face hard choices with President Trump in office.
It was unclear if the omission reflected While House recognition of steep declines in illegal immigration along the Southwest border, where U.S. Border Patrol arrests have plummeted to their lowest numbers in years. The reductions, officials say, are largely the result of U.S. crackdowns spanning both the Trump and Biden administrations and enhanced Mexican efforts to detain and push back U.S.-bound migrants.
The good news for Mexico is that the peso, despite fluctuations amid Trump’s shifting rhetoric, has remained relatively stable — a fact that Starr said suggests “financial markets don’t believe Trump” will really impose tariffs.
Everything Trump says has to be taken at face value. The Mexican government cannot afford to do otherwise.
— Gustavo Flores-Macías, professor of government at Cornell University
Providing a chilling backdrop to the current tariff debate in Mexico are memories of past major peso devaluations — especially the peso crisis of 1994-95, which ignited the same year that the North American Free Trade Agreement (NAFTA) went into effect, opening up the era of largely duty-free trade among Mexico, the United States and Canada. The economic crisis spurred a massive wave of migration to the U.S.
While Trump has a history of issuing sweeping threats only to pull back at the last minute, many experts say they must be taken seriously.
“Everything Trump says has to be taken at face value,” said Gustavo Flores-Macías, a professor of government at Cornell University. “The Mexican government cannot afford to do otherwise.”
Among Mexican officials, the hope is that cross-border industries likely to be affected by tariffs — notably the automotive sector — will exert sufficient pressure on Trump’s advisors to cancel the tariffs by arguing that new taxes will raise prices for U.S. consumers and slow the U.S. economy.
A likely scenario is that Trump could again “kick the can down the road,” said Idelfonso Guajardo, who, as a former Mexican economics minister, helped negotiate the current North American trade agreement with the first Trump administration.
“I’ve always said that Donald Trump is the most disruptive individual I have known — but also the most predictable,” Guajardo said.
Times special correspondent Cecilia Sánchez Vidal contributed to this report.
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