Introduction
Mexico has prioritized open trade policies since the late 1980s, making it a cornerstone of economic development under various political parties. This article explores Mexico’s journey in global trade, its recent challenges due to U.S. President Donald Trump’s tariff policies, and the potential impact on Mexico’s economy.
Mexico’s Embrace of Open Trade Policies
Mexico’s open trade policy initiative is not indigenous to the country. In fact, Mexico joined the model proposed by the United States after World War II through the General Agreement on Tariffs and Trade (GATT) relatively late.
Mexico moved past its populist era to achieve what was once unthinkable: a free trade agreement with the United States during Carlos Salinas de Gortari’s presidency.
Three decades later, despite not abandoning the open trade model, the primary advocate for free trade has decided to reassess its perception of open borders.
Trump’s Tariffs and Their Impact on Mexico
President Trump’s tariff decisions and the uncertainty surrounding the future of the U.S.-Mexico bilateral trade agreement have caused concern in Mexico’s economy, which exhibits a high Trade Openness Index (exports plus imports as a percentage of GDP) of 74.7%
Though the negative effect of Trump’s tariff policy has been delayed due to his administration’s hesitation and businesses stockpiling before new tariffs take effect, it is clear that the bill will eventually come due.
Ironically, Trump’s threat to global trade has inadvertently boosted this activity during the first half of 2025.
According to the World Trade Organization (WTO), global merchandise trade volume increased by 4.9% year-over-year between January and June, leading to an upgraded 2025 growth forecast of 2.4% compared to the previous April estimate of -0.2%.
However, the negative impact is now projected to affect 2026, as the WTO no longer anticipates a 2.5% volume expansion (as previously estimated in April) but only a 0.5% increase.
Specifically, for North America—the epicenter of the new global trade policy and Mexico’s region—the WTO estimates a 5.8% decline in trade volume for 2026.
Among the economic forecasts for 2026, this revision is currently the most pessimistic for Mexico’s economy, attributed to the delayed implementation of Trump’s tariff policy and hopes for a bilateral or trilateral agreement in North America to mitigate anticipated poor results.
Key Questions and Answers
- What are open trade policies? Open trade policies refer to government initiatives aimed at reducing barriers to international trade, such as tariffs and quotas, to promote economic growth through increased trade volumes.
- Why is Mexico’s trade openness index significant? Mexico’s high Trade Openness Index (74.7%) indicates that its economy is heavily dependent on international trade, making it vulnerable to external shocks like changes in tariffs or global trade policies.
- How have Trump’s tariffs affected Mexico? Although the negative impact of Trump’s tariffs has been delayed, it is expected to affect Mexico’s economy in 2026, with the WTO projecting a 5.8% decline in North American trade volume.
- What are the implications for Mexico’s GDP? Many positive GDP forecasts for 2025 are due to the delayed effect of Trump’s tariffs on global trade volumes. However, this perspective suggests potential difficulties for Mexico’s economy in the coming year.
