Sheinbaum pushes for reduced Chinese imports to shield Mexico from potential U.S. tariffs

During his 2024 presidential run, Donald Trump campaigned on imposing steep tariffs, including on the nation’s closest trading partners Canada and Mexico, as part of his plan to rebuild the US economy. He made his threat formal at the beginning of February slapping 25% levies on goods coming in from both of those countries, as well as an additional 10% on goods from China.

However, before those for Canada and Mexico were to take effect, he put their implementation on pause for a month after talking to the leaders of both nations. Trump, to show for the threat, got reiterations of previously agreed to actions by both leaders and a major dip in US stock markets.

While the temporary reprieve from the tariffs is in place, both nations are analyzing their options moving forward. Mexico for its part had already gotten a head start.

Mexico looks to bolster economic standing

A week before Trump was sworn in, Mexican President Claudia Sheinbaum presented a policy initiative, called Plan Mexico, drawn up by her administration and the Business Council to attract investment and grow the economy. The goal is to move Mexico from its current position as the 12th largest economy to make it one of the world’s top ten.

The Mexican government has identified over 2,000 viable projects that could bring $277 billion in investments to the nation. “Our goal is to let people know that, in the face of any uncertainty in the near future, Mexico has a plan and is united going forward,” Sheinbaum told those in attendance.

The plan has an ambitious goal of creating 1.5 million additional jobs annually in specialized manufacturing and priority sectors alone. It also seeks to train 150,000 professionals and technicians per year.

The road map lays out increasing by 15% domestic production in strategic sectors like automotive, aerospace, electronics, semiconductors, pharmaceuticals and chemicals, among others. According to the plan, by 2030, half of national consumption for goods including textiles, footwear, furniture and toys will be produced by local manufacturers.

Mexico to reduce Chinese imports

Additionally, the nation will seek to reduce its dependence on imports from China. Trump has accused Mexico of being a back door for Chinese goods to get around US tariffs already in place something its leaders have denied. Currently, Mexico has a trade deficit with the Asian giant of over $100 billion.

One of the major difficulties in the short term is the lack of “inputs, parts and components” such as semiconductors which cannot be currently sourced from the USMCA North American free trade zone warns the director of the Mexican Maquiladora Association, Carlos Palencia, which represents 6,500 companies in Mexico that manufacture goods for US parent companies to be exported to the United States.

Furthermore, the nation will need to have a follow-up plan to expand its export horizons says international trade expert Adolfo Laborde at the Center for Economic Research and Teaching (CIDE). “If we remain with the current export structure, this new strategy would only facilitate exports by transnationals installed in the country, whose purpose is to produce and sell in North America,” he told El País.

“We need a new economic nationalism driven by Mexican entrepreneurs, permeated by processes of innovation, regional development and strengthening of productive capacities to redefine the course of the country’s economic relations,” he added.

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