Background on Key Figures and Relevant Context
President Donald Trump has threatened to impose a 30% tariff on imports from Mexico, citing insufficient cooperation against the U.S. fentanyl crisis and his country’s trade deficit with Mexico.
In a letter to Mexico City Mayor Claudia Sheinbaum, Trump no longer explicitly mentioned migration as a reason for this tariff imposition. Instead, he focused on Mexico’s policies related to drug trafficking, migration, and the trade deficit.
Trade Deficit Concerns
Trump emphasized that the fentanyl issue is not the only challenge with Mexico, as there are numerous tariff and non-tariff barriers causing unsustainable trade deficits against the U.S.
“I must mention that the fentanyl flow is not the only challenge we have with Mexico, which has many tariff and non-tariff barriers and trade barriers causing unsustainable trade deficits against the United States. The trade deficit is a significant threat to our economy and, indeed, to our national security!” Trump stated in the letter.
From January to May 2025, the U.S. had a merchandise trade deficit of $79,442 million with Mexico, recording exports of $140,068 million and imports of $219,510 million.
Trump’s Coercion Tactics
Trump also pressured Sheinbaum, stating that if Mexico decides to increase tariffs, the new rate would be added to the 30% already imposed.
Tariff Analysis and Impact
Gabriela Siller, an analyst at Banco Base, estimated that the U.S. should be collecting an average effective tariff of 14.24% on imports from Mexico, considering all existing tariffs, including the recent 30% one.
Currently, only 84% of U.S. imports from Mexican products pay tariffs, partly due to operational delays of around 50 days at U.S. customs.
However, reported figures show that the tariff collected is approximately 4.34%, as only 47.16% of Mexican imports comply with T-MEC rules.
Tariffs are imposed on Mexican products like steel, aluminum, and copper (50%), as well as autos and certain auto parts (25%) in the U.S.
The U.S. content exemption for Mexican and Canadian autos remains, while arancel on auto parts from both countries is also exempt if the products qualify as origin under the T-MEC, pending a formal procedure by the Department of Commerce to apply the tariff only to non-U.S. content.
Mexico’s Response
In response, Marcelo Ebrard, Mexico’s Secretary of Economy, announced that a Mexican delegation from the Economy, Foreign Affairs, Finance, Public Security, and Energy secretariats met with the State, Commerce, and Energy departments, along with the National Security Council and the U.S. Trade Representative’s office on July 11 to establish a permanent bilateral working table.
The table was convened by the State Department and will involve all participating instances in various matters.
Ebrard mentioned that security, migration, border management, and economic relations between the two countries were discussed.
“We were informed that, as part of a profound change in U.S. trade policy, all countries would receive a letter signed by the U.S. President establishing new tariffs starting August 1. We mentioned in the meeting that it was an unfair deal and we did not agree,” Ebrard stated.
Ebrard reported that the primary task of the permanent bilateral working table will be to conduct work leading up to August 1, ensuring a solution that protects businesses and jobs on both sides of the border.
“It is very relevant that since July 11, we have established the necessary path and space to resolve any possibility of new tariffs taking effect on August 1. In other words, Mexico is already negotiating,” Ebrard concluded.
Key Questions and Answers
- What is the reason behind Trump’s tariff threat? Trump cited insufficient cooperation from Mexico regarding the U.S. fentanyl crisis and an unsustainable trade deficit.
- What tariffs currently exist on Mexican imports? Tariffs range from 50% on steel, aluminum, and copper to 25% on certain auto parts. The average effective tariff is estimated at 14.24%.
- How has Mexico responded to the tariff threat? A Mexican delegation met with U.S. counterparts to establish a permanent bilateral working table focused on resolving trade issues.
- What is the current U.S. trade deficit with Mexico? The merchandise trade deficit from January to May 2025 was $79,442 million.
- What products are primarily affected by these tariffs? Mexican imports of steel, aluminum, copper, and certain auto parts face tariffs in the U.S.
