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For the second time, Mexico is preparing to negotiate with US President Donald Trump, whose threats of tariffs, mass deportations, and military action against drug cartels have raised the potential for significant diplomatic challenges.
The Washington Office on Latin America (WOLA) cautions that Trump’s second term could intensify approaches taken during his first run, posing significant risks to democratic norms, civil liberties, and judicial independence, while stifling global cooperation on climate change and inclusion. Key appointments for Trump’s second term, such as Marco Rubio as US Secretary of State, Christopher Landau as Deputy Secretary of State, and new US ambassadors to Latin America, including Mexico, signal that the region will take center stage in US foreign policy, with migration and drug trafficking dominating the agenda. WOLA has expressed caution at Trump’s alignment with populist leaders such as Argentine President Javier Milei, Salvadoran President Nayib Bukele and Brazil’s former President Bolsonaro, predicting that these alliances could embolden authoritarian actors and weaken democratic institutions across the hemisphere.
Faced with these challenges, Mexico’s negotiators are adopting a proactive and assertive strategy, leveraging their experience from Trump’s first term. Former President López Obrador managed to stave off severe tariffs by fostering a pragmatic relationship with Trump, agreeing to strict migration controls in exchange for economic stability. Marcelo Ebrard, Minister of Economy, underscored the resilience and interdependence of the US-Mexico economic partnership. "We will find a solution because we have structural advantages that anchor our relationship."
President Claudia Sheinbaum, yet to engage directly with the incoming Trump administration, has navigated a strategic balance between diplomacy and steadfast determination. She has affirmed that Mexico will not hesitate to impose retaliatory tariffs if Trump proceeds with his plans. “We coordinate, we collaborate, but we will never become subordinated,” Sheinbaum declared.
Pablo Calderón Martínez, Associate Professor, Northeastern University, emphasized that Trump’s proposed 25% tariffs on Mexican imports could severely damage Mexico’s economy, undermine Sheinbaum’s plans, and erode public trust in her leadership, despite her current 70% approval rate. He also points out that these tariffs would hurt US consumers, disrupt global trade, and risk dismantling agreements like NAFTA and institutions, such as the World Trade Organization. “There is a genuine concern that Trump might issue an executive order on day one to impose 25% tariffs on all Mexican goods, effectively nullifying the Free Trade Agreement of North America,” Calderon explained.
While the situation remains uncertain, Calderón suggested that Mexico could use immigration as a bargaining tool if trade tensions escalate. However, this continues to be a pressing issue. Policies upheld during the Biden administration, such as Deferred Action for Childhood Arrivals (DACA), Temporary Protected Status (TPS), and humanitarian parole for migrants from Cuba, Haiti, Nicaragua, and Venezuela, could be dismantled under Trump. Additionally, Trump’s large-scale deportations, possibly involving military personnel, could result in millions being deported from the United States, creating significant pressure on other Latin American countries. Experts also warned that a “Remain in Mexico” program could be reinstated, further straining Mexico’s resources. In addition, a renewed focus on border wall construction and expanded US enforcement powers could lead to increased human rights violations.
Adding to the pressure, Trump has floated the idea of deploying US special forces in Mexico to combat drug cartels, a move that has raised alarms over sovereignty, democracy, and human rights. While such actions may not materialize, experts caution that the mere threat of unilateral measures could signal the future of US-Mexico relations, fostering an environment of coercion.
“If the Trump 2.0 administration prioritizes harmful militarized actions that look ‘tough’ on crime or the border, there will be little room left for cooperation in the areas actually relevant to strengthening rule of law, protecting the population, and reducing forced migration,” states WOLA.
Despite these threats, Calderón suggests that Trump’s policies could also inadvertently rally support around Sheinbaum’s administration. “Trump has a way of uniting Mexicans against a common adversary. Whenever he makes controversial statements, such as his remarks about renaming the Gulf of Mexico, it provides Sheinbaum an opportunity to assert Mexico’s sovereignty, call for unity, and project strong leadership.”
Mexico's economic outlook for 2025 is cautious, with growth projected at 1.2%, down from 1.6% in 2024, according to a Reuters poll. Alongside US economic uncertainty, the country faces challenges such as weak private consumption, reduced export performance, and falling fixed investment. Banxico is expected to lower its benchmark interest rate to 8.50% by the end of 2025. While some economists anticipate a gradual approach to rate cuts, there is a sense of caution against significant policy shifts that could trigger negative market reactions.