The accumulated loss in two and a half months equals 2.3 times the total value of the Mexican GDP. Although yesterday was not as critical a day as Monday, the perception in the market persists that we will face a very complex economic situation this year, especially if Trump decides to impose more tariffs.
It will depend on the extension of the application of tariffs, some of which are already in place. Tariffs are already in effect for imports from China, and a 25 percent tariff for products from Mexico and Canada that do not meet the requirements established in the USMCA for exemption.
According to the Secretary of Economy, Marcelo Ebrard, only 10 percent of Mexican exports to the United States fall into that category; however, some analyses based on data from the Department of Commerce indicate that it could be as much as 50 percent. In certain sectors, it is preferred not to adhere to the disciplines set by the USMCA, especially regarding regional content established in the Treaty.
More than economic growth or any other signal, it is the behavior of the stock markets that matters most to some. So far this year, the market capitalization value of the Nasdaq in New York has decreased by $3 trillion, and the loss in value of the New York Stock Exchange, measured by the S&P 500 index, is $1.4 trillion in the same period. In summary, these two major stock markets alone total losses of $4.4 trillion this year.
If Trump aimed to revitalize the US economy, he is probably starting to become frustrated. The main concerns in the stock markets stem from the perception that the US government is willing to tolerate economic problems, assuming that they will be transient and will lead to greater growth in the future. This is an idea that does not completely convince many investors.
