The Trump administration has decided to delay the imposition of tariffs on the automotive industry of Mexico and Canada by one month. The President of Mexico has shown caution regarding this volatile situation. Mexico may take some measures in this regard.
The measure to impose a 25 percent tariff on most products exported by Mexico and Canada to the United States, trade partners in the USMCA, had been announced by Trump previously. Although these tariffs are considered to violate some articles of the USMCA, Washington may argue that Mexico has previously violated the agreement by using imported inputs from China in its products.
Economists agree that a tariff war would negatively affect the economies of Canada, the United States, and Mexico. This situation could lead Mexico to establish trade agreements with other regions of the world. While Mexico has mentioned the possibility of imposing tariffs in retaliation, it has not been officially announced, unlike Canada and China.
It is important to consider the diversification of Mexico's foreign trade. The country could thrive in an economic regime based on law rather than force. Trump and U.S. Secretary of Commerce Howard Lutnick might be considering lifting tariffs partially or completely after meeting with the major American automotive companies.
An urgent meeting between the political forces of the Mexican and U.S. Congress is necessary to address this situation. Caution is understandable, given that the Trump administration has rapidly changed its opinion in the past. Mexico could lead the consolidation of a rules-based liberal system that is currently at risk. Involving the legislative power in bilateral discussions would be a good idea.
