Mexico considers reciprocal tariffs in response to US trade measures

President Claudia Sheinbaum prefers dialogue but warns Mexico may retaliate if negotiations fail.

Mexican President Claudia Sheinbaum raises her fist and shouts "Viva Mexico" during the launch of the Plan Mexico economic initiative at the Anthropology Museum in Mexico City on April 3, 2025. Photo by Yuri Cortez/AFP

By Anna Fadiah and Hayu Andini

Mexico considers reciprocal tariffs in response to US trade measures, but President Claudia Sheinbaum says her government will prioritize dialogue before escalating tensions. In a press conference held Monday, April 7, Sheinbaum addressed growing concerns after the United States announced steep tariff increases on selected imports. While she acknowledged that Mexico may be forced to respond, the president emphasized a cautious and measured approach to protect Mexican industry.

"As much as possible, we want to avoid implementing reciprocal tariffs," Sheinbaum said, referring to US President Donald Trump’s executive order signed earlier this month. The order introduces a “minimum floor rate” of 10 percent on imports from various trading partners, with some goods facing tariffs of up to 25 percent.

Sheinbaum confirmed that Mexico’s Economy Minister Marcelo Ebrard will travel to Washington DC this week to “continue talks” with the US government in hopes of finding a diplomatic solution.

A balancing act between diplomacy and defense

Sheinbaum made it clear that Mexico does not want to engage in a tit-for-tat tariff war. Yet, she also stressed the importance of protecting national interests, especially the manufacturing and export sectors.

“We are not ruling out a 25 percent increase, but we would prefer to continue the dialogue before taking any other steps,” Sheinbaum said.

Her administration is navigating a complex landscape. On one hand, it seeks to maintain stable economic ties with its largest trading partner. On the other, it must respond to pressure from domestic industries affected by Washington’s new trade rules.

Mexico’s National Chamber of the Iron and Steel Industry warned this week that the tariffs could severely impact steel exports, an essential pillar of the Mexican economy. According to the Chamber, a prolonged tariff regime could lead to job losses, reduced investment, and increased production costs for manufacturers.

The White House confirmed that goods covered by the United States-Mexico-Canada Agreement (USMCA) will continue to enjoy tariff-free status. However, products not protected by the trade pact will now face up to 25 percent tariffs under Trump’s new policy.

The move marks a return to the kind of protectionist trade strategy that defined much of Trump’s first term. Supporters argue that the tariffs are necessary to level the playing field and correct long-standing imbalances. Critics, however, say the policy will raise prices for American consumers and risk destabilizing global supply chains.

Mexico, which sends nearly 80 percent of its exports to the US, finds itself particularly vulnerable. While some sectors remain shielded under USMCA, many others — including those with growing potential — now face new hurdles.

Business leaders in Mexico are urging the government to tread carefully. They argue that sudden tariff hikes on American goods could backfire, increasing prices on critical imports such as machinery, electronics, and agricultural equipment.

"We must defend our industries, yes," said Ana Salazar, a trade analyst based in Mexico City. "But retaliatory tariffs could trigger inflationary pressures and disrupt sectors that rely heavily on American inputs."

Salazar noted that Mexico’s economic recovery from recent global shocks remains fragile. She added that open dialogue and strategic negotiations are essential to avoid a scenario where both countries suffer.

All eyes now turn to Economy Minister Marcelo Ebrard’s visit to Washington, scheduled for later this week. According to officials, Ebrard will meet with US Trade Representative Robert Lighthizer and other senior officials to present Mexico’s position and advocate for sector-specific exemptions.

“We believe that open communication and economic diplomacy can prevent this situation from escalating,” Ebrard said in a separate statement. He underscored the need for both governments to uphold the spirit of cooperation embedded in USMCA.

Observers note that Ebrard’s task will not be easy. With the US election cycle heating up and President Trump eager to show strength on trade, political incentives in Washington may not favor compromise.

Sheinbaum’s economic priorities tested

President Sheinbaum, who took office with promises of inclusive growth and industrial revitalization, now faces a critical test of leadership. Her ability to manage external economic pressure without triggering internal disruption will likely shape public perceptions of her administration.

In her Monday press conference, Sheinbaum reiterated that her government would act with caution but would not hesitate to defend Mexican sovereignty and jobs.

“Our priority is to protect Mexican industry and companies,” she stated. “We will explore all options, from negotiation to targeted responses, if necessary.”

Sheinbaum’s position reflects a broader strategic vision: maintain open channels with the United States, but stand firm when core interests are threatened.

The trade dispute between the US and Mexico could also have ripple effects across Latin America. Several regional economies depend on access to North American markets, and any disruption in trade flows could lead to shifts in supply chains and investment trends.

Countries like Brazil and Chile are closely watching how the Sheinbaum administration responds. Some analysts believe that Mexico’s stance may influence how other governments deal with similar pressures from Washington.

“Mexico’s handling of this situation will be a case study for the region,” said Gabriel Ortega, a Latin American economist based in Bogotá. “It’s a delicate balancing act between sovereignty and pragmatism.”

As Mexico considers reciprocal tariffs in response to US trade measures, the next few days could prove decisive. The outcome of Ebrard’s visit to Washington will likely determine whether the situation escalates or de-escalates.

For now, Mexico appears committed to a path of dialogue, even as it prepares for potential retaliation. Sheinbaum’s administration faces growing demands to stand firm, but also rising expectations to avoid a damaging trade war.

Whatever happens next, the message from Mexico is clear: while diplomacy is the preferred path, the country will not stand idle if its economic interests are undermined.