Mexico warns Trump his steep tariffs will hammer the US economy

Massive job losses and more expensive pickup trucks: That’s what the steep tariffs Donald Trump is threatening to slap on his neighbors will mean for the US, according to Mexico’s government.

Trump’s pledge to impose 25% tariffs on Mexico and Canada would lead to 400,000 job losses in the US, Economy Minister Marcelo Ebrard said Wednesday during a press conference alongside President Claudia Sheinbaum.

A veteran of confrontational North American trade talks during Trump’s first administration, Ebrard gave a presentation on how a new round of levies would affect the Mexico-US relationship.

Ebrard said the new tariffs would mainly hit US automotive companies active in Mexico, including General Motors and Ford Motor Company, which produce 88% of the pickup trucks sold in the US. “Our estimate is that the average price of these vehicles will increase by $3,000 per unit," he noted.

Mexico is stepping up its defense against Trump’s new tariff threats, rallying a group of national businesspeople at Sheinbaum’s daily press briefing. Officials said the government also plans to advance its trade agreement with the European Union and improve its commercial ties with Brazil.

On Tuesday, Sheinbaum suggested Mexico could respond to the threat of tariffs with levies of its own, warning the economic consequences would be dire. “One tariff will be followed by another in response, and so on until we put common companies at risk," the president said in her first response to Trump’s threats.

The US president-elect is vowing to impose 25% tariffs on imports from Canada and Mexico until fentanyl and undocumented migrants stop flowing over US borders. Canada says it has a plan to boost border security — and points to US government data that shows most of the problems come from Mexico.

Sheinbaum said Canada also needs Mexico and that she is confident the northern nation will remain in the North American trade agreement that will be reviewed in 2026. She also said her government is in touch with Trump’s transition team.

Mexico has become the US’s largest trading partner, with the Mexican government estimating there’s now $800 billion annually in total trade between the neighbouring countries.

Ebrard underlined the importance of improving the trade relationship between the US, Mexico and Canada, saying it stood at $1.8 trillion between January and September, and generates 30% of the world’s GDP.

“If tariffs are imposed and we enter into a process of raising tariffs, who is going to be affected? All three countries," Sheinbaum said. “We do not compete with each other, we complement each other."

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