The Hidden Costs of U.S. Tariffs on Mexico

Mexico faces a challenging economic outlook as it confronts the possibility of U.S. tariff sanctions. While the country’s domestic market is strong enough to withstand a trade war in the short term, such measures could slow growth, deter investment, and hinder economic development in the medium term, according to economists at UNAM. These sanctions could also weaken trade integration within North American supply chains.

At a press conference titled “The Impact of U.S. Tariffs on Mexico,” José Manuel Márquez Estrada from UNAM’s Institute for Economic Research emphasized that tariffs would harm both nations. While they might boost government revenue, he warned that abrupt implementation without proper planning could limit the effectiveness of these funds for strategic investments.

Samuel Ortiz Velásquez from UNAM’s Faculty of Economics explained that out of the more than 10,000 products Mexico exports to the United States, fewer than 3% would be subject to the 25% tariff. However, this small subset—mainly machinery, electronics, and auto parts—accounts for 80% of the total tariff burden, significantly impacting key sectors of the Mexican economy.

In the United States, importing businesses and consumers would bear the brunt of the tariffs through higher costs. Experts noted that these sanctions could disrupt supply chains that have developed over decades under NAFTA and its successor, the USMCA, potentially affecting industries reliant on cross-border trade.

In addition to raising concerns about regional competitiveness, these measures could introduce uncertainty in U.S.-Mexico trade relations, potentially affecting economic and social stability in North America.