The potential application of tariffs by Donald Trump would negatively impact the economic growth of Mexico. According to Goldman Sachs, a 1 percentage point increase in U.S. import tariffs could lead to a price increase in Mexico of 0.09 percent. A 10 percent increase in U.S. tariffs on all Mexican imports could raise prices by approximately 100 basis points.
According to Goldman Sachs estimates, if tariffs are applied, Mexico's growth could be reduced by between 2.0 to 3.5 percent in its GDP. Since taking office, Donald Trump has threatened to impose tariffs on Mexican exports, even mentioning measures of up to 25 percent as early as February. The uncertainty about which sectors these tariffs would apply to increases tension in the trade relationship between both countries.
An analysis conducted by Goldman Sachs chief economist Alberto Ramos indicates that a widespread 10 percentage point increase in U.S. tariffs would reduce Mexico's GDP by approximately 2 percent. This figure would increase to 3.5 percent if tariffs reached 25 percent. Even if tariffs are never applied, the uncertainty generated by trade policy could have a negative impact of between 0.5 and 1.0 percent on the Mexican GDP.
In Ramos's words, "Uncertainty leads to more defensive investment and spending decisions." It is evident that the imposition of tariffs by the United States would have significant consequences on the Mexican economy, especially in terms of growth, inflation, and trade flow.
