The United States will impose a 30% tariff on imported goods and merchandise from Mexico starting August 1, US President Donald Trump announced early Saturday in a letter to his Mexican counterpart, Claudia Sheinbaum, and published on his social media platform Truth. The Republican president justifies his threat “to deal with our country’s fentanyl crisis, caused in part by Mexico’s failure to stop the cartels (…) from filling this country with drugs,” Trump wrote.
“Mexico has been helping me secure the border, BUT (caps in the original) what they've done isn't enough. Mexico hasn't yet stopped the cartels from trying to turn all of North America into a drug playground. I can't let that happen. Starting August 1st, I will impose a 30% tariff on all products shipped to the U.S., excluding sector-specific levies [copper, aluminum, steel, and autos]. Exports [from Mexico] that try to evade this burden will be subject to higher tariffs.”
The announcement of the tariff on Mexico, of the same amount as the tax on the European Union, comes days after the Republican taxed 35% on imports from his other preferred partner, Canada, and 50% on all imports from Brazil, five times the tax imposed on Brasilia on April 2 - subsequently postponed for 90 days. The tariff on Brazil is in retaliation for the treatment its authorities are giving to former President Jair Bolsonaro, whom Trump considers the victim of a"witch hunt" in the trial for his participation in the January 2023 coup, after having lost the elections months earlier.
Mexico's Foreign Ministry and Economy Ministry reacted to Trump's letter by recalling that the two countries had begun trade negotiations the day before."It is highly significant to have established, since July 11, the necessary path and space to resolve any possibility of new tariffs going into effect on August 1. In other words, Mexico is already in negotiations," the joint statement reads.
During that meeting, the official statement continues,"issues of security, migration, border and water management were discussed, as well as the economic relationship between the two countries. We were informed that, as part of the profound change in US trade policy, all countries would receive a letter signed by the President of the United States establishing new tariffs effective August 1. We mentioned at the meeting that this was an unfair deal and that we disagreed."
Last April, when Trump launched his battery of"reciprocal tariffs" for 185 countries, Trump had excluded his USMCA partners, Canada and Mexico. This meant that products that comply with the trade agreement remained tariff-free, while those that did not comply paid a 25% tariff. The White House document added that once the emergency orders on fentanyl and immigration are lifted, products that comply with the trade agreement would continue to receive preferential treatment, while those that did not would be subject to a 12% reciprocal tariff.
Mexico's exclusion from reciprocal tariffs initially provided partial relief from the tax burden that the US has been imposing on Mexican exports since last March. Latin America's second-largest economy is burdened with a 25% tax on exports excluded from the USMCA, which currently account for 50% of its shipments to the United States, as well as the 25% tariff on steel and aluminum.
Mexico is the largest U.S. importer. The country sends more than 80% of its exports to its neighbor, worth more than $500 billion annually.
Last Wednesday, Sheinbaum, who has always avoided direct confrontation with Trump, announced that she would send a delegation of senior Mexican officials to Washington on Friday to work on the"general agreement" she proposed to her counterpart at the G-7 leaders' meeting last month. The proposal addresses migration, border security, and, of course, trade. Sheinbaum said her government would do everything possible to negotiate the best terms for Mexico in the face of the new tariff threats."We are going to make every effort on our part. The people of Mexico know that we are working on it," she said at a press conference last Wednesday.
The initial plan was for Sheinbaum's delegation to take advantage of their visit to Washington to address Mexico's situation regarding the tariffs Trump is seeking to impose on copper exports (50%) and pharmaceutical products (up to 200%)."We will always seek the best conditions for Mexico. Decisions often come from the United States government, and we seek to generate, for example, in the case of copper, other export schemes, because copper is needed in many parts of the world. So there are some options," Sheinbaum said.
