Background on Donald Trump’s Stance
President Donald Trump has a strong dislike for trade deficits, viewing them as proof that free trade doesn’t work and the world is taking advantage of the United States. To rectify this perceived “injustice,” he has implemented tariffs and aggressively promoted “Made in USA” products.
Impact on Trade with Canada and China
While these strategies have reduced the deficit with Canada and China, they haven’t altered the trade trend with Mexico.
Current Trade Deficit with Mexico
From January to July, the trade surplus in Mexico’s favor reached a record-breaking $112.587 billion, marking a 17.7% increase compared to the same period in 2024.
- Mexico exported $309,719 million to the US (6.5% more than in 2024).
- Mexico imported $197,161 million from the US (1.1% more than in 2024).
The deficit grows despite Trump’s furious rhetoric and protective measures, including a 50% tariff on Mexican steel and aluminum since March, special tariffs on vehicles and auto parts (13.9% of their value) since April, and specific taxes on tomatoes (17%) and raw copper (50%) since July.
Why Mexico’s Numbers Still Look Good
Mexico has been less affected by tariffs than other countries, according to Mexico’s Secretary of Economy, Marcelo Ebrard. Over 80% of bilateral trade is protected by the USMCA, keeping the average tariff paid by Mexican exports below 7%. In contrast, the US average tariff is 18.6%, the highest since the 1930s.
Mexico’s Growing Importance as a US Trade Partner
In 2025, Mexico has solidified its position as the US’s leading trade partner. Mexico accounts for 15.3% of US foreign purchases, while Canada has 13%, and China’s share has dropped to 7.8% due to escalating tensions between the world’s two largest economies.
Looking Ahead
While government-to-government negotiations and Trump’s plans to reshape global trade flows are crucial, it’s also worth noting corporate decisions on investments, employment, and supply chains. US companies’ choices on where to source materials and suppliers will significantly impact the trade dynamics.
Mexican exports to the US have grown by $18.5 billion in the first seven months of 2025, a testament to the resilience of thousands of companies, entrepreneurs, and workers overcoming challenges like Trump’s threats, tariffs, insecurity, and an unfavorable exchange rate.
With only seven weeks left before the three-month pause on a 30% tariff on Mexican exports ends, attention should also be paid to the Mexican government’s commitment to eliminating over 50 non-tariff barriers, including customs-related issues, Cofepris, energy sector matters, telecommunications, and complaints about tolerance for smuggling and piracy.
Beyond tariff pauses, the US has announced plans to impose tariffs on furniture and pharmaceutical exports. In 2026, the USMCA review will begin, accompanied by intense White House pressure on Mexico to boost purchases of US products. There will be no respite from trade tensions.
