Economics: Some general implications on the Mexican economy of Trump's executive orders

MEXICO - Report 27 Jan 2025 by Mauricio González and Francisco González

Some of the threats made against Mexico by then-candidate Donald Trump during his presidential campaign were converted into executive orders on the day he was inaugurated. He persists in his threats to impose an additional 25% tariff on Mexico and Canada, and 60% on imports from China. However, the executive order instructs various government departments to carry out an analysis of trade (including with Mexico) and the possibility of imposing tariffs, which must be concluded by April 1.

This measure could have a strong impact on economic growth in the short term, in addition to placing the US in a more advantageous position when the USMCA is revised or renegotiated. Likewise, a mass deportation of illegal immigrants, in addition to its consequences for Mexico’s northern border cities, would put significant pressure on the Mexican labor market. This could include an expansion of the informal economy that could leave many people more exposed or susceptible to recruitment into illicit activities.

And in indicators published last week, the latest IGAE showed the Mexican economy’s growth rate break just below a percentage point in November, as did the industrial sector rate on continuing weakness in construction and mining. Moreover, retail sales suffered a slight sequential contraction, and while inflation broke sharply lower, tariff threats from Washington further cloud the outlook for Banxico rate policy.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2025 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.