United States Increases Steel and Aluminum Tariffs, prompting Mexico's threat of Reciprocal Measures; Europe and Others Hurry to Evade Additional Taxes
In the heart of Washington, global trade tensions continue to mount as Mexico lays down the gauntlet, vowing retribution after the US hiked its import duties on steel and aluminum to a staggering 50%. This move, taken by President Donald Trump, applies to all nations, with the exception of the UK, which secured a reprieve through a preliminary trade agreement.
The new tariff rates took effect at midnight on June 4. Mexican Economic Minister Marcelo Ebrard vehemently denounced the move, labelling it "unsustainable and unfair." He confirmed that the country is gearing up to respond and asserted, "We cannot accept this in silence. Our response will be firm but calibrated."
Ebrard held a press conference in Mexico City to announce these fiery words. Meanwhile, the Mexican Chamber of Commerce demanded immediate government action, fearing the consequences of rising production costs and potential job losses in the nation's manufacturing sector.
What exactly does Mexico have in store as their countermeasure? The specifics remain under wraps, but one thing is certain - Mexico is focused on safeguarding its national industry and jobs, without these measures necessarily being a form of retaliation. President Claudia Sheinbaum has emphasized this point, stating that these measures are intended to safeguard Mexico's economic interests. She has hinted at an announcement next week if no agreement can be reached with the US during ongoing negotiations.
As of now, the 90-day negotiation period between Mexico and the US is underway, with this period ending on July 9. This leaves ample time for potential agreements or adjustments to the tariffs. Mexico's strategy leans towards defensive actions, aiming to preserve employment and domestic businesses affected by the increased tariffs. The country is also looking to leverage compliance with the USMCA (United States-Mexico-Canada Agreement) and the emergent trade normalization trends in North America. These tactics could help Mexican firms adapt and ultimately capitalize on the situation by reshoring and availing compliance incentives.
- The global trade industry is closely watching Mexico's responses in the face of increased US tariffs on steel and aluminum, as Mexico vows retribution and gears up to defend its national industry and jobs.
- The focus of Mexico's countermeasures is twofold: safeguarding economic interests through defensive actions aimed at preserving employment and domestic businesses, and leveraging compliance with the USMCA and emerging trade normalization trends in North America to adapt and potentially capitalize on the situation.
