‘Cool head’: How Mexico’s Claudia Sheinbaum is dealing with Trump and tariffs
As United States President Donald Trump’s sweeping 25 p.c tariffs on imports from Mexico and Canada had been about to kick in, Canadian Prime Minister Justin Trudeau was fast to hit again.
In a information convention on Monday evening, he referred to Trump as “Donald”, referred to as the tariffs a “very dumb factor to do”, accused the US president of attempting to cripple the Canadian economic system to annex the nation and imposed speedy retaliatory tariffs.
Against this, Mexican President Claudia Sheinbaum was silent on Monday evening. She responded in a information convention on Tuesday morning, promising to defend Mexican pursuits and saying tariffs on US imports. However in contrast to Canada, Mexico’s tit-for-tat tariffs will come into impact solely on Sunday, giving it time to strike a take care of the US.
On Thursday, Sheinbaum is anticipated to talk with Trump to attempt to sew collectively a compromise even because the US president’s public spat with Trudeau intensifies.
So why is Mexico’s president approaching Trump’s tariffs so in another way from how Canada and Trudeau are dealing with them? How is Mexico responding to Sheinbaum’s technique? How did we get right here? And what’s at stake?
What are Trump’s tariffs, and what’s his justification?
Even earlier than he was sworn into workplace for a second time in January, Trump introduced he would impose 25 p.c tariffs on all items from Canada and Mexico, citing considerations over border safety and drug trafficking, notably the circulate of fentanyl into the US.
The US is the second largest items dealer on this planet after China, and Trump’s tariffs have rattled world markets.
These tariffs had been initially scheduled to take impact on February 4, however negotiations between Trump and the leaders of Canada and Mexico resulted within the US suspending their imposition for a month.
In these negotiations, Trudeau and Sheinbaum agreed to spice up border safety to stop drug trafficking and the entry of migrants into the US.
Trudeau appointed a “fentanyl czar” to deal with that difficulty. Sheinbaum deployed 10,000 further troopers to the US-Mexico border to assist curb irregular immigration. Inside Mexico, her regulation enforcement companies busted fentanyl gangs, raided labs and made arrests. Final week, Mexico despatched 29 drug cartel leaders to the US for prosecution.
Nonetheless, on Tuesday, Trump enforced the 25 p.c tariffs, affecting a wide selection of products. Extra tariffs had been additionally imposed on China.
The US’s prime three buying and selling companions – Mexico, Canada and China – account for greater than 35 p.c of the products that the world’s largest economic system imports or exports.
How did Canada reply?
Canada responded promptly and assertively to the US tariffs with retaliatory protectionist measures of its personal that it had first introduced on February 1.
Beginning on Tuesday, Canada imposed 25 p.c tariffs on $21bn price of US items with the specter of tariffs on one other estimated $87bn later if the dispute lasts.
Trudeau warned that Canada “is not going to again down from a struggle” and tariffs would stay in place till the US tariffs are withdrawn.
Merchandise together with, meats, grains, sure alcohol, garments, footwear, bikes and cosmetics are simply among the US items that will likely be topic to speedy tariffs, in line with Canada’s Division of Finance.
Some Canadian provinces have taken steps of their very own, ordering the elimination of all US liquor from shops, as an illustration.
Trudeau, in feedback on Tuesday, additionally appeared to again Canadians who’re selecting to boycott American items and boo the US nationwide anthem at sports activities occasions.
Trudeau had a name with Trump on Wednesday, however whereas the US president mentioned it ended on a “considerably ‘pleasant’” notice, he subsequently accused Canada of permitting fentanyl to enter the US — despite the fact that consultants mentioned solely a minuscule quantity of the opioid comes into the US throughout its northern border.
How has Mexico responded?
Whereas Trump and Trudeau have exchanged heated private remarks in latest weeks, Sheinbaum has taken a extra measured method.
In her feedback on Tuesday, Sheinbaum expressed the intention to implement “tariff and non-tariff measures” to safeguard Mexico’s pursuits however shunned speedy motion, suggesting she intends to exhaust all diplomatic channels first.
“What I can inform you is that this can be a very definitive second for Mexico. … There may be not going to be submission. Mexico is a superb nation, and Mexicans are courageous and resistant,” she mentioned.
If the tariffs proceed, Mexico “will attain out to Canada and different nations”, Sheinbaum mentioned. She added that Mexico might search for different buying and selling companions apart from the US and will shift commerce alliances “if needed”.
What’s behind Sheinbaum’s comparatively measured method?
At a briefing with reporters in early February, Sheinbaum supplied insights into her mindset, saying that amid threats from Trump, Mexico wanted to maintain a “cool head”.
This cautious technique displays Mexico’s heavy reliance on the US as a market: Greater than 75 p.c of Mexico’s exports go to its northern neighbour, so any dramatic disruption in that equation might bleed the nation’s economic system. Final yr, the US imported $505.8bn in items from Mexico and exported $334bn, leading to a commerce deficit of $171.8bn.
To make sure, Canada additionally wants the US for its exports: Greater than 70 p.c of Canadian exports go to the US.
However the context of Trump’s tariffs on Mexico and Canada is sort of totally different, Vina Nadjibulla, vp of analysis and technique on the Asia Pacific Basis of Canada, informed Al Jazeera.
Whereas Trump up to now has mooted the concept of bombing Mexico’s drug cartels, lots of which his administration has designated as “terrorist” organisations, he has been far more direct in looking for Canada’s territory.
Trump has regularly mentioned his northern neighbour ought to turn into the 51st US state and has repeatedly referred to Trudeau, together with after their name on Wednesday, as governor fairly than prime minister.
“In Canada’s case, Trudeau famous that Trump’s actions are aimed toward crippling the Canadian economic system to pave the way in which for an eventual annexation, which fits past a mere commerce battle,” Nadjibulla mentioned, referring to Trump’s repeated threats to soak up Canada.
“It’s an existential struggle for Canada’s sovereignty, so there’s a robust incentive to push again instantly and forcefully,” she mentioned.
Commenting on the brand new tariffs, Trudeau on Tuesday mentioned Trump was planning to trigger the “complete collapse of the Canadian economic system as a result of that can make it simpler to annex us”.
“Retaliation right here isn’t nearly tit-for-tat tariffs. It’s about defending the nation’s independence,” Nadjibulla mentioned.
In the meantime, Trump has mentioned he respects Sheinbaum, one thing that the Mexican president has referred to whereas saying she too respects the US president.
Sheinbaum additionally has one thing that Trudeau doesn’t: time.
Canada is quick approaching nationwide elections, and Trudeau’s Liberal Celebration is taking part in catch-up. After trailing the opposition Conservative Celebration by double digits for greater than a yr, the nation’s ruling social gathering has began to quickly shut the hole as Trudeau pushes again towards Trump’s strikes and the US president’s steps stoke a wave of patriotism amongst Canadians.
Sheinbaum, however, took workplace solely in October and is wildly fashionable. In two polls in February, her approval ranking was 80 p.c and 85 p.c.
Is Sheinbaum’s method working?
It’s too early to say.
However on Wednesday, the Trump administration exempted auto producers from the 25 p.c tariffs for a month. Whereas the sector’s provide chains are unfold throughout North America, Mexico is the largest beneficiary of the reprieve. Vehicles, vans, different autos and auto elements represent 27 p.c of its exports to the US. For Canada, that determine stands at 13 p.c.
And Sheinbaum enjoys extra than simply fashionable assist in Mexico. Her method to Trump and his tariffs seems to have the belief of Mexican traders too.
The IPC, the principle index of the nation’s inventory alternate, is up 6 p.c from the beginning of the yr. Against this, the S&P/TSX, the benchmark Canadian inventory alternate index, is nearly the place it was at first of the yr.
What’s subsequent?
If the tariffs and the retaliatory steps taken by the US neighbours keep in place, companies exporting items and companies in addition to shoppers can pay larger costs. A possible recession in some or all three North American nations is a risk.
As tensions simmer, there are indicators that the US administration might take into account modifying its place. Studies out of the US recommend Trump is open to reducing the 25 p.c tariffs on items from Canada and Mexico.
But when Trump decides to de-escalate, Nadjibulla mentioned, “the injury to belief is already substantial.”
“We’ve seen him threaten new tariffs in April and proceed to shift targets. That degree of unpredictability erodes confidence amongst allies and buying and selling companions,” she mentioned.
The tariffs might additionally have an effect on negotiations on renewing the United States-Mexico-Canada Settlement (USMCA), a free commerce pact that got here into impact in 2020, was negotiated by Trump’s staff throughout his first time period and changed the North American Free Commerce Settlement of 1994. A assessment of the USMCA is due in 2026, however the tariffs might see talks happen sooner.
“How do you negotiate a steady settlement when one social gathering is constantly altering the principles or imposing new tariffs with out warning?” Nadjibulla requested.
“Even when some tariffs get lifted or eased, the larger difficulty is that Canada and others now view the US as a much less dependable commerce associate,” she added.
