Background on Key Figures
Claudia Sheinbaum, the President of Mexico City, and Donald Trump, the former U.S. President, exchanged contrasting messages following their 40-minute phone call on July 31. Trump claimed that Mexico would continue paying a 25% tariff on fentanyl and automobiles, as well as a 50% tariff on steel, aluminum, and copper. He also mentioned the removal of “numerous non-tariff barriers.” Sheinbaum, on the other hand, celebrated avoiding a 30% tariff increase and securing a 90-day truce “to build a long-term agreement through dialogue.”
Sheinbaum’s Stance and Trump’s Imposition
During her morning press conference, Sheinbaum reiterated that no new concessions were made, the T-MEC was preserved, and Mexico stood firm on its principles. She asserted that a “good agreement” was reached and the call was respectful, with the support of Commerce Secretary Marcelo Ebrard, Foreign Affairs Secretary Juan Ramón de la Fuente, and Subsecretary for North America Roberto Velasco. Ebrard emphasized that Mexico has no non-tariff barriers and is in a better position than the rest of the world, though this claim lacks full substantiation.
Despite the optimistic statements, Trump’s imposed measures from February remain in effect. The 25% tariff on non-T-MEC products linked by Trump to fentanyl continues. The 25% tariff on autos excludes auto parts, and the 50% tariff on metals affects even exports that comply with the treaty. Although a deeper wound was avoided, the bleeding persists. No tariffs have been reversed, and relief is merely a postponement. The implicit message is clear: Trump did not remove anything, only delayed further blows.
Trump’s Narrative and Sheinbaum’s Administration
While Sheinbaum spoke of respect and dialogue, Trump imposed his narrative of victory. He did not mention concessions but made it clear that Mexico must eliminate regulatory obstacles for a definitive agreement. Although Sheinbaum insisted no new promises were made, acknowledging the review of “non-tariff issues” confirms that negotiations could lead to structural changes affecting key sectors of the national economy, such as intellectual property, pharmaceutical patents, labor rules, energy, and agriculture.
Economic Impact on Mexico
Since the tariffs took effect, Mexico has lost over 139,000 formal jobs, and economic growth has weakened. BBVA estimates that tariffs could subtract up to 1.5 percentage points from the GDP this year. The IMF, though it improved its estimate recently, predicts a mere 0.2% growth. Moody’s and the OECD have also downgraded their forecasts, with sectors like automotive, steel, electronics, and agribusiness reporting declines in orders and investment cancellations.
Sheinbaum’s Firmness and Trump’s Conditions
Sheinbaum projected firmness and internal legitimacy, while Trump imposed conditions and ultimatums. Both claimed credit for the dialogue, but in reality, Trump dictates while Sheinbaum manages damage control. The 90-day extension is merely time; if tariffs are not reduced, today’s diplomatic victory could become tomorrow’s economic disaster.
Key Questions and Answers
- Q: What was the outcome of the phone call between Sheinbaum and Trump? A: Contrasting messages were exchanged. Trump claimed Mexico would continue paying tariffs on certain goods, while Sheinbaum celebrated avoiding a higher tariff increase and securing a 90-day truce for long-term agreement negotiations.
- Q: How have Trump’s tariffs affected Mexico’s economy? A: Mexico has lost over 139,000 formal jobs, and economic growth has weakened. Tariffs could subtract up to 1.5 percentage points from the GDP this year, with sectors like automotive, steel, electronics, and agribusiness reporting declines in orders and investment cancellations.
- Q: What are the potential structural changes resulting from negotiations? A: Negotiations could lead to structural changes affecting key sectors of the national economy, such as intellectual property, pharmaceutical patents, labor rules, energy, and agriculture.
