Breathe
By Barbara Anderson
A couple of weeks ago, The Economist magazine published the 'Trump Risk Index', where it listed the 70 largest trading partners of the United States according to their exposure to the policies of the Republican businessman. In a world map, they painted in different shades of red the level of exposure to Donald Trump in a second term, and highlights in the entire planisphere a single country in black: Mexico, with the maximum score, the maximum risk (71 out of 100).
We are the country most at risk in a second term of this candidate. Starting precisely because of our commercial relationship and then because of our geographic position:
As of this year, we are the main trading partner of the world's largest economy, and this pleasant reality can turn against us. More than 86% of our total exports go to the United States. Trade deficits are a big concern for Trump, and the deficit with Mexico increased to $152 billion in 2023, a 37% growth from 2020. Only China has a larger deficit with them. If in his first candidacy he focused on a wall to shut out migrants, this time his focus is on a container, to shut out Mexican exports.
"Tariffs, my favorite word," he has repeated on several of his soapboxes around the country. This week, his former Trade Representative, Robert Lighthizer (who participated in the renegotiation of the T-MEC), published an editorial in the Financial Times where he justifies the use of tariffs and prepares his speech: "Our trading partners, particularly those with large trade surpluses, should not blame us for the change in policy. We would simply be responding to the damage they have caused".
Can he impose tariffs on partners like Mexico, with whom he has an FTA? Well yes, the judiciary has spent much of the campaign trying to understand the extent to which presidential authority can use tariffs for national security reasons or unfair trade practices. Trump promised to impose 10% to 20% on all imports and 60% for those coming from China. The tariffs would reduce Mexico's GDP by at least 1.5%, according to London-based think tank Capital Economics.
2.Review of the T-MEC: Although the tripartite review of the free trade agreement with Mexico and Canada must be carried out in July 2026, the legislative commissions and analysis tables will begin in January 2025 with the new conformation of the U.S. Congress. And, although this treaty is "his baby", the treaty he devised to replace the "worst that his country had signed" (as he referred to NAFTA), that is no guarantee either. In fact, in one of his speeches he stated that he does not want a revision, but a renegotiation, to return everything to zero because he would even prefer 'no trade agreement'. Today we export under the cover of the treaty some 1.5 million dollars per minute, some 2,304 million dollars every 24 hours. Our bilateral trade represents the equivalent of one third of our national GDP.
3.Deportations: the promise to return millions (yes) of migrants, most of them Mexicans, who live in the United States with non-formal status, would directly affect remittances coming into the country, which have not only been a balm for millions of families but have also supported the stability of the Mexican peso. Every hour, migrants send 6.5 million dollars to our country.
Border: the Republican candidate's idea is to force Mexico to become a safe third country, forcing non-Mexican immigrants to seek asylum in our country. If Claudia Sheinbaum's government also wants to maintain the status quo here, it will revive the 'Stay in Mexico' model, which will increase pressure from migrant groups in border cities.
Security: In a campaign document, Trump outlines that military aid would likely be more conditional and that allies would be intimidated into increasing their own defense spending. The issue of fentanyl trafficking has revived his exaggerated talk that the U.S. government should bomb illegal labs on Mexican soil. This is unlikely, but it could give the DEA more leverage in terms of pressure, adding fuel to the fire already lit by the power struggle within the cartels following Mayo Zambada's surrender to US authorities.
"He is an unpredictable person," one of the officials who was in charge of the renegotiation from 2017 told me. And that adjective is the one that businessmen, investors and firms that are moving their projects to the Latin American country closest to the United States, driven by the wave of nearshoring, want to hear the least.
While it could be difficult for Trump to impose his most radical ideas (such as the expulsion of migrants or the increase in tariffs), there would be more risk in international policy issues. The greater the risk, the greater the uncertainty and, therefore, the less interest in investing or increasing investments in our country.
The opinions expressed are the responsibility of the authors and are absolutely independent of the position and editorial line of the company. Opinion 51.
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