As President-elect Donald Trump prepares for a second term, his "zero tolerance" immigration promises—which defined his campaign—are on top of mind. This time, he plans to make Mexico a central part of his task force, threatning the country with increasing trade tariffs if it fails to mitigate migration to U.S. borders—intertwining international trade and immigration objectives in an unprecedented way.
Trump has proposed imposing tariffs as high as 100% if Mexico does not curb migration to levels he deems satisfactory. Yet, with border crossings already at record-low levels, his specific expectations remain unclear. Mexico's new president, Claudia Sheinbaum, has sought to maintain a diplomatic tone, pledging to pursue dialogue and respect. Yet, Mexico's Secretary of Economy, Marcelo Ebrard, has cautioned that Mexico could respond with retaliatory tariffs.
It is worth noting that the U.S. remains one of Mexico's largest trading partners – and vice versa – with bilateral trade hitting $855 billion in 2022, per data from the U.S. Trade Representative's Office. While some experts warn that tariffs would cause Mexico to enter a recession, others caution that U.S. consumers and companies would feel the impact as well.
To explore these issues further, the Latin Times interviewed Dr. Jeremi Suri, award-winning global affairs lecturer and author. Suri believes Trump's tariffs could ultimately backfire, inflicting greater damage on the U.S. economy by disrupting supply chains in key industries, driving up prices for American consumers, reducing production efficiency, and straining international trade partnerships.
Read on for an in-depth Q&A that exposes why this strategy may cost the U.S. far more than it could gain. This interview has been edited for length and clarity.
LT: How would imposing these tariffs on Mexican imports impact both the U.S. and Mexican economies, given their interconnected supply chains?
Dr. JEREMI SURI: These tariffs will have an enormous impact on both economies because many Mexican products are essential for what American manufacturers produce. For example, car parts, parts for air conditioners, water heaters, things of that sort.
These tariffs will raise the cost for consumers, and they will also reduce the efficiency and quantity of production because companies will have to reallocate factories and the production of specific parts, which takes a lot of time.
So the immediate effects will be that prices will go up, supply will go down, and profitability for companies will go down as well.
And it will particularly hurt the United States more than Mexico because Mexico has other places it can sell its parts to. There are other people who want the parts that they produce, and the finished consumer goods that American manufacturers are then making. Those will be hard to supply from anywhere else.
So it will actually hit the United States harder than Mexico in my prediction.
LT: Could Mexico respond with counter tariffs, and if so, what sectors might be most affected?
JS: Well, I think President Scheinbaum will try initially to negotiate without responding with counter threats, but I think of course she could do that. Mexico could do that.
I think they would in particular again target the American auto industry. They will target oil production equipment. They will target farm equipment. They will target some of the main equipment, the main elements that we use for other economic activity in the U.S.
So, it's less about consumer goods themselves and more about the parts that are used to make consumer goods.
LT: How could these policy changes impact the broader U.S.-Mexico relationship, particularly regarding economic partnerships?
JS: So, I think, big picture, and I felt this when I was in Mérida about a month and a half ago talking to a group of Maquiladora leaders. You know, what I felt was that they will always, Mexico will always look for a friendly relationship with the United States. It's necessary for Mexico. It has no alternative.
There will always be some cooperation. But the big takeaway for me is that this pressure from the U.S. is encouraging Mexican business people and Mexican political leaders to look at alternatives to the U.S., particularly China. It makes other partners more attractive.
It doesn't mean that they will not partner with the U.S., but they are less trusting, less willing to depend upon the U.S. So it's very rational to be more open to China and other partners. So this is a win for China.
LT: How might other countries with close ties to the U.S. view these actions? Could this set a precedent in international policy?
JS: Yes, I think throughout Central and particularly in Latin America, countries are noticing this. Brazil is in the same situation. If you look at things, you know, Lula has been very careful to maintain friendly relations with the U.S., but he's also been more open to China, and even to Russia.
Lula has not condemned the war in Ukraine. So these countries are going to balance more against the U.S. and open themselves to more non-U.S. partnerships and relationships. And Mexico will be a model for some of them.
LT: Overall, what is your take on Trump's international trade agenda?
JS: Interdependence between the U.S. and Mexico has benefited both countries. We're going to see efforts at more separation, less interdependence. And I think that's going to cause a lot of economic disruption.
I think [the interdependence] might return—in a few years because people will see this as harmful. But we're going to see a period where there's an effort to be more protectionist, which is just the opposite of what the U.S. has done for the last 20 to 30 years.
LT: Trump claims his foreign trade policies will strengthen the national economy and U.S. businesses. Do you see it that way?
JS: No, just the opposite.
You know, the Texas miracle, the state of Texas, which has done so well economically, is largely because of immigrant labor, right? If you make it harder and remove this population, you raise labor costs. We already have a labor shortage. We will have more of a labor shortage.
So that's one problem. And then if you impose tariffs, that raises the costs for everything. So voters in the U.S. were upset, some of them, that the cost of food and the cost of houses had gone up. The cost is going to go up even more. Everything Trump is doing is going to raise the costs.
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