04 / 16 / 25
Mexico Facing Trump’s Tariffs: When Trade Tensions Turn Into Opportunities
MEXICO CITY, MEXICO, April 16th, 2025 – Six specialists outline a useful map of risks and opportunities for Mexico in the new trade landscape during a webinar organized by LexLatin.
“It’s like playing with fire,” said Michael Camuñez, President of Monarch Global Strategies, referring to the recent wave of tariffs announced by the Trump administration.
In what was dubbed “Liberation Day,” the United States shook the foundations of international trade on April 2 with an announcement that triggered an immediate drop in global stock markets. Amid the turbulence, however, Mexico has skillfully navigated the diplomatic waters, receiving differentiated treatment that keeps its privileged trade relationship alive — at least outside of sectors that rely on aluminum and steel for their operations.
Amid the uncertainty sparked by recent announcements, international trade and U.S.–Mexico relations experts gathered for the second session of a webinar series organized by LexLatin, moderated by its CEO, Fernando Peláez-Pier, in strategic partnership with Monarch Global Strategies and SMPS Legal. During the discussion, the panel analyzed the impact of recent developments and shared their insights on what lies ahead under this new tariff paradigm. They outlined not only the latent risks for Mexican companies but also the strategic opportunities emerging from the cracks of this global trade reconfiguration. The question now is no longer whether change is coming—it already has—but rather how well-positioned Mexico is to turn this disruption into a competitive advantage.
The motivations behind Trump’s trade policy
According to Camuñez, Trump’s new tariff policy is primarily driven by three factors: “First, there is a fundamental belief within the White House that tariffs are a geopolitical tool and can serve U.S. interests by forcing investors and capital markets to bring investments back to the United States, thereby restoring its industrial manufacturing capacity,” Camuñez explained.
Second, he noted, tariffs are a clear expression of U.S. power, rooted in the perception that trade partners have been “taking advantage” of the country. Finally, these measures aim to help finance part of Trump’s domestic agenda, particularly the proposed tax cuts, which—if enacted—would require the government to secure between one and two trillion dollars to balance the deficit.
Like most U.S. economists, Camuñez is highly skeptical about the effectiveness of these measures in achieving their stated goals. He warned that they are highly inflationary, could lead to the loss of thousands of jobs, and may ultimately trigger a global recession. He also pointed out that the United States has ceased to be a reliable partner—there is no way to know which agreements will hold and which may be unilaterally altered.
Nevertheless, despite the tense environment, he emphasized that Mexico has managed the situation with diplomatic skill.
“President Sheinbaum and her team have done a very good job demonstrating what I call strategic patience. They have defended Mexico’s interests without being overtly combative toward President Trump,” he noted.
This has been reflected in the differentiated treatment Mexico received in the tariff announcements. President Trump signed an order that explicitly excluded trade compliant with the USMCA, which continues to operate tariff-free—except in the cases of steel, aluminum, and certain non-compliant auto parts.
“Last Tuesday was a bloodbath for the world, but a day of good news for Mexico and the USMCA,” said Camuñez, though he cautioned that the trade agreement still faces significant challenges.
“We are witnessing the beginning of a renegotiation process for the agreement, and we know that the Trump administration is seeking substantial changes […], but Mexico remains a very attractive place to invest. If the USMCA holds, and if Mexico retains its privileged trade position with the United States, the country should be well positioned to strengthen its commercial ties with the European Union, Japan, South Korea, Brazil, and a wide range of other trading partners,” he stated.
The impact on supply chains and business strategies
Luis Rodríguez, Managing Partner at Monarch, explained that in the current context, companies urgently need to review their supply chains.
“Companies must analyze their dependence on non-North American inputs, particularly those from China and other Asian countries that have been affected by these reciprocal tariffs,” he advised.
Luis Curiel, partner at SMPS Legal, emphasized that innovation will be key for companies—innovation in both product redesign and supply chains. “Companies need to optimize the design of their products to ensure they qualify correctly under the new tariffs and modify their production processes,” he pointed out.
Both experts agreed that this situation serves as a significant wake-up call for Mexico. “We must ensure we have all the right elements in place to maintain competitiveness in Mexico, such as an efficient energy policy and the right infrastructure,” Rodríguez noted.
A recurring concern among clients of both firms is uncertainty. “Without certainty, companies cannot plan for the future,” Curiel pointed out. This sentiment was echoed by Camuñez, who highlighted that “The main concern we constantly hear is simply the lack of visibility regarding the rules of the game.”
Gerardo de la Peña, Senior Advisor at Monarch, shared the results of a recent survey conducted with 70 CFOs in Mexico, where “they basically responded that their companies are not prepared to handle this situation regarding the tariff war.” De la Peña estimated that the impact of these measures could result in a loss of 2% of Mexico’s GDP, a figure that could rise to 3.5% if the Mexican government decided to respond with similar measures.
Imminent Opportunities for the Mexican Economy
Despite the complex scenario, the panelists identified significant investment opportunities in Mexico, as well as the need to strengthen the domestic market.
Eduardo Pizarro Suárez, partner at SMPS Legal, highlighted that in terms of security, there is “an active fight against organized crime, the extradition of major drug lords, etc., which represents a shift from the previous government and is very beneficial for fostering investment.” Pizarro also mentioned the ambitious Plan México announced in January by President Claudia Sheinbaum, which aims to increase foreign investment to 100 billion dollars annually and generate 1.5 million jobs. “We are facing an excellent opportunity to react, become more competitive, and improve our production capacity,” he stated.
An important obstacle, however, is the one pointed out by Curiel: judicial reform and the upcoming popular election of judges. “Clients have no certainties. That’s why the challenge is to plan for what can be planned without knowing what the future holds,” he noted.
Pedro Niembro, Executive Director at Monarch, emphasized the opportunities in the energy sector following the recent reform. “It is very positive that Claudia Sheinbaum and her team have recognized the need to create the right conditions for industries to come to Mexico,” he stated. He identified specific, highly attractive opportunities in energy generation and storage, microgrids, water treatment plants, railways, port expansion, and agribusiness.
Fernando Peláez-Pier, CEO of LexLatin and moderator of the panel, proposed closing the debate with a statement that translated into a vote of optimism: “Times of crisis are times of opportunity.” He noted that “since Trump’s election in November, Mexico has received foreign investment announcements totaling around 17 billion dollars from 46 companies,” including highly relevant firms. “It is up to the Mexican government to understand the potential they have if they do things right” to bring these investments to fruition, emphasizing that the essential element to achieve this is trust.
“Geography is destiny, and that means Mexico will always play an important role in international trade and global politics,” Camuñez concluded. Will Mexico be able to take advantage of the opportunities presented by this moment? In the opinion of Daniel del Río, partner at SMPS Legal, “This is a powerful wake-up call that is forcing all countries to look for new opportunities. Mexico needs to strengthen Plan México and take advantage of the fact that local governments are promoting investment incentives. These are challenging times, yes, but also times of great opportunities if we change our attitude and expand our vision beyond North America.”
The truth is that the future is unwritten, and changes will come at a dizzying pace. For this reason, Peláez-Pier concluded the debate by inviting the audience to a new session of analysis in the coming months, which we will be inviting all our readers to in advance.
The full article was made in collaboration with Lexlatin, and you can find the original article in Spanish here in: https://www.lexlatin.com/gestion-lexlatin/mexico-aranceles-trump-tensiones-comerciales-oportunidades
All the information placed in this article and the rights of distribution belongs to @Lexlatin.
