Mexico is projecting confidence that it will fend off

a new set of 30 per cent tariffs

that US President Donald Trump threatened on July 12 to impose i n August , with talks already underway to avert the worst.  

After Mr Trump went public with his plan by posting on social media, Mexican President Claudia Sheinbaum noted in speeches near the northern border that every country has been getting a letter from Mr Trump as he implements global protectionist policies.

Her team had already begun discussions with the US on July 11 and she was confident Mexico would get a deal.

“We’ve had some experience with these things for several months now,” Ms Sheinbaum said at a clinic opening in Ensenada, Baja California.

“And I think we’re going to reach an agreement with the United States government.”

Mexico-US relations have taken a bumpy turn since June, with increasing roundups of migrants by US agents, the border shuttered to livestock due to

a screwworm infestation in Mexico

, US Attorney-General Pam Bondi’s reference to the neighbouring country as an adversary, and the financial strike by the US Treasury on three Mexican financial firms accused of aiding fentanyl traffickers.

Mr Trump’s letter threatened new tariffs on Mexico due to a lack of progress in challenging the country’s drug cartels. 

But behind the scenes, work has been advancing between the Sheinbaum and Trump administrations.

Mexico is still in a favourable position relative to the rest of the world and its poised to benefit from protectionist US policies over the medium term, according to Bloomberg Economic’s Felipe Hernandez.

That outlook assumes the US does not apply the 30 per cent rate to goods that are compliant with the US-Mexico-Canada (USMCA) free trade agreement. That exception is part of the plan, but the situation remains fluid, a US official cautioned. 

Continuing the exclusion for both Mexico and Canada narrows the scope of Mr Trump’s continental tariffs and would be a lifeline to sectors like the auto industry that rely heavily on the USMCA pact, which was renegotiated under Mr Trump’s first term.

Mexico and the US established a new binational working group on July 11 to address security, migration and economic issues, according to a statement posted on July 12 by Mexican Economy Minister Marcelo Ebrard on X.

The first major task of the group will be to find an alternative to the tariffs and “protect jobs on both sides of the border”, the statement read.

“We told the group that this treatment is unfair and that we’re not in agreement,” read the statement, jointly signed by the Economy and the Foreign Affairs ministries.

The US president said the 30 per cent tariffs are separate from sectoral ones and could be raised if Mexico retaliates.

“Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground,” Mr Trump wrote. “If Mexico is successful in challenging the Cartels and stopping the flow of Fentanyl, we will consider an adjustment to this letter.”

On July 11 , the son of Sinaloa drug cartel kingpin Joaquin “El Chapo” Guzman Loera pleaded guilty to federal drug trafficking charges and agreed to cooperate with US prosecutors.

The US has blamed the Sinaloa Cartel for leading the fentanyl trade, importing chemicals from China to make pills in Mexico and smuggle them into the US. 

On July 9, US Treasury extended a deadline that will cut off three Mexican financial firms from the US financial system for potentially aiding in money laundering from the fentanyl trade. The US praised Mexico’s cooperation in the move. BLOOMBERG

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