Mexican President Claudia Sheinbaum told cheering crowds Sunday that she is confident that her country has headed off the threat of US tariffs for now.
Last week, Sheinbaum's US counterpart Donald Trump agreed to offer another month of temporary relief on threatened tariffs on imports from Mexico.
During a huge rally in Mexico City of 350,000 people, according to local authorities, Sheinbaum declared herself "optimistic" about the future of the trade relationship.
But she also warned Mexico "cannot give up our sovereignty."
Sheinbaum originally organized the event to announce the tariff and non-tariff trade measures with which Mexico would respond if Trump had carried through with his threat.
But on Thursday, Trump once again put a pause on plans to impose a 25 percent tariff on imports into the United States from Mexico -- which represent 80 percent of Mexican exports.
Announcing the truce, Trump said he had done this out of respect for Sheinbaum and argued that the pair have a "very good" relationship.
US financial markets had also reacted negatively to the tariff threat, and most economists agree that if implemented they would damage both countries' economies.
"We gather to congratulate ourselves because, in the relationship with the United States, with its government, dialogue and respect prevailed," Sheinbaum said.
In the Mexican capital's Zocalo square, she added: "We cannot yield on our sovereignty, nor can our people be affected by decisions made by foreign governments.
"In such a case, we will always act immediately," she said. "I am convinced that the relationship must be good, respectful, and that dialogue will always prevail."
Trump's justification for tariffs on US imports from Mexico and Canada -- which are part of the USMCA trilateral free trade deal -- has varied.
He claims the US economy is losing out to unfair Mexican and Canadian competition, but also accused both of turning a blind eye to undocumented migrants and illegal drugs.
In particular, Washington is incensed over shipments of fentanyl, a synthetic opioid that kills thousands of Americans each year.
Citing US figures, Shenbaum told the crowd that -- thanks to seizures made in Mexico -- the amount of fentanyl into the United States across the countries' 1,900-mile (3,100-kilometer) border decreased by half between October 2024 and January 2025.
She said Mexico will continue to cooperate to tackle smuggling for "humanitarian reasons" and she hopes the United States remembers its promise to control the trafficking of arms to Mexican criminal organizations.
While Mexico is an important supplier to the United States of products such as avocados and tequila, the biggest impact of a trade war would be on the manufacturing production chains of the three USMCA partners.
Experts warn that if the tariffs as described by Trump were implemented then Mexico would fall into recession.
Seeking to correct alleged trade imbalances, Trump has pledged to launch "reciprocal" tariffs on all countries beginning on April 2.
Sheinbaum said she was "optimistic because on that day... they would not have to be applied" to Mexico, given most products are covered by the USMCA trade deal.
