Trade Tensions Escalate Amidst Mexico's Strategic Moves

Mexico's economy officials assert the country's negotiation power amidst trade talks with Trump's administration. With potential tariffs looming, the impact on U.S. companies raises doubts. Mexico prepares for discussions and highlights its foreign investment strengths while downplaying U.S. concerns over China-Mexico trade connections.

Mexico's top economy officials reassured the public on Tuesday, addressing concerns over trade negotiations with the incoming Trump administration. They emphasized that potential tariffs could negatively impact American companies, leading President Trump to reconsider his stance. Trump had campaigned on imposing hefty tariffs to revive U.S. jobs, a move economists say could severely affect Mexico's export-centric economy and also harm the U.S.—albeit to a lesser extent.

At a press conference, Mexico's Economy Minister, Marcelo Ebrard, underscored the significance of Mexico's negotiation power, highlighting the presence of numerous multinational companies in the country. He warned that any risk to the U.S.-Mexico trade relationship could affect thousands of businesses, noting, "There's hardly an important U.S. company that doesn't have money here." Ebrard indicated the possibility of retaliatory measures by Mexico.

With Trump's inauguration approaching, Mexico is preparing for official meetings. A review of the trilateral trade agreement with Canada is scheduled for 2026. Ebrard also noted that concerns about China using Mexico to bypass trade barriers are overstated, with only 0.4% of Chinese investments in North America reaching Mexico. Meanwhile, Mexico's capability to attract substantial foreign direct investment continues to be a vital strength.

(With inputs from agencies.)