By Sarah Morland and Raul Cortes
MEXICO CITY (Reuters) – Mexican Financial system Minister Marcelo Ebrard mentioned on Wednesday {that a} 25% across-the-board tariff proposed by U.S. President-elect Donald Trump would result in the lack of 400,000 jobs in the USA, sluggish development and harm U.S. firms and shoppers.
“It is a shot within the foot,” Ebrard mentioned in a morning press convention, whereas including the transfer would additionally harm Mexican exports and calling for extra regional cooperation and integration as a substitute of a warfare of retaliatory import taxes.
He warned the tariffs would in impact double the taxes paid by U.S. companies producing in Mexico. “The affect on firms is large,” he mentioned.
Ebrard mentioned the proposed tariffs would hit the automotive sector’s high cross-border export companies particularly arduous, particularly Ford (NYSE:), Basic Motors (NYSE:) and Stellantis (NYSE:), and push up automobile costs for shoppers by 1000’s of {dollars}.
Mexico is the USA’ high commerce associate and its automotive trade is the nation’s most vital manufacturing sector, exporting predominantly to the USA. It represents almost 25% of all North American automobile manufacturing.
Analysts at Barclays (LON:) mentioned they estimate proposed 25% tariffs in opposition to Canadian and Mexican imports “might wipe out successfully all income” from the Detroit three automakers.
“Whereas it is typically understood {that a} blanket 25% tariff on any automobiles or content material from Mexico or Canada might be disruptive, traders underappreciate how disruptive this might be,” they wrote in a be aware on Tuesday.
Trump’s press workforce, in addition to Ford and Stellantis, didn’t instantly reply to requests for remark. GM declined to remark.
Mexican President Claudia Sheinbaum referred to as for dialogue and cooperation between the 2 commerce companions on Tuesday, the morning after Trump introduced the measure which would seem to violate the United States-Mexico-Canada Settlement (USMCA), a free commerce pact Trump signed throughout his first time period.
She hinted Mexico would reply with its personal retaliatory tariffs, whereas analysts speculated on the potential for a brand new commerce warfare beneath Trump’s subsequent presidency.
Mexico’s automotive trade group AMIA mentioned it could put together for any chance and wait to see what formal actions are taken.
The USMCA is up for evaluation in 2026.
Katia Goya, director of worldwide economics at Grupo Financiero Banorte (BMV:), mentioned it was seemingly the three USMCA international locations would search wholesale renegotiation of the pact relatively than simply rubber-stamp it to proceed in its present kind.
“The impact of a commerce battle state of affairs is that it’s going to imply decrease financial development in the USA, increased unemployment and better inflation,” Goya mentioned.
Ebrard mentioned USMCA commerce had amounted to $1.78 trillion within the first 9 months of this yr.
“We will fragment and divide with tariffs,” Ebrard mentioned. “Mexico doesn’t need conflicts and divisions, however to construct a stronger area.”
