Mexico eyes fresh US targets to pressure Trump on steel tariffs
$2.7b Damage to Mexican economy thanks to US tariffs
MEXICO CITY — Mexico’s government threatened to slap duties on new US products in retaliation for the Trump administration’s steel and aluminum tariffs as it seeks to turn up pressure on Washington to exempt it from the measures.
US President Donald Trump set tariffs of 25 per cent on imported steel and 10 per cent on aluminium in June, causing Mexico and other trade partners to hit back. One of the United States’ three biggest trading partners, Mexico has consistently argued that the tariffs only damage commerce in North America and should be withdrawn.
Mexican Deputy Economy Minister Luz Maria de la Mora told Reuters in an interview that if the US government did not repeal the tariffs, her government would have a revamped list in its “carousel” of US targets ready in about two months.
“We’re carrying out an evaluation, and there are products from the agricultural sector, we’re probably going to bring in some new ones and take some others out, as well as in the industrial sector and the steel industry,” de la Mora said.
The value of the goods targeted under the list would remain equivalent to the impact of the Trump tariffs, de la Mora said, estimating the damage they caused at $2.7 billion.
Mexico’s previous government wasted little time in retaliating against the metal tariffs, slapping measures on products ranging from apples to cheese, as well as various steel products.
Even if the value of the goods targeted by Mexico would remain the same, swapping in new products could encourage more US businesses to lobby Washington against Trump’s tariffs.
The new Mexican government of leftist President Andres Manuel Lopez Obrador took office in December, and de la Mora said the country would continue to reject Trump’s measures. “We should not fall into this protectionist trap,” said de la Mora, who brought years of experience working in international trade for the Mexican government to the post.
Noting that Trump had tried to use the metal tariffs as leverage during the renegotiation of the North American Free Trade Agreement, de la Mora said that given that a new deal had been reached last year, the argument was now void. “Mexico is not a national security threat for the United States,” she said. “This is really important; it really needs to be understood that Mexico is a partner, Mexico is an ally.”
Downgrade threat
Meanwhile, the Mexican government faces a one-in-three chance of having its credit rating downgraded over the coming year, as public finances struggle with mounting liabilities and slowing growth, rating agency Standard & Poor’s said.
In a statement, S&P emphasised that Lopez Obrador’s plans to reduce the private sector’s role in the Mexican energy sector while boosting spending on cashstrapped national oil company Pemex raised concerns for government finances.
“The new strategy for the energy sector places an added burden on the already highly indebted government-owned energy company Petroleos Mexicanos,” Standard & Poor’s said in the statement, referring to the official name of Pemex.
“The combination of Pemex’s weak financial profile and a more active role in the energy sector could raise the risk of higher contingent liabilities for the sovereign,” it added.