Mexico suggests it would impose its own tariffs in retaliation at any Trump move

President Claudia Sheinbaum has suggested Mexico could retaliate with tariffs of its own, after US President-elect Donald Trump threatened to impose 25% tariffs on Mexican goods if the country does not stop the flow of drugs and migrants across the border.

Ms Sheinbaum said she is willing to engage in talks on the issues, but said drugs are a US problem.

“One tariff would be followed by another in response, and so on, until we put at risk common businesses,” she said, referring to US car manufacturers that have plants on both sides of the border.

She said on Tuesday that Mexico has done a lot to stem the flow of migrants, noting “caravans of migrants no longer reach the border”.

She also said Mexico has worked to stem the flow of drugs, like the deadly synthetic opioid fentanyl, even though “it is a problem of public health and consumption in your country’s society”.

Ms Sheinbaum’s bristly response suggests Mr Trump faces a very different Mexican president from the one in power during his first term.

In late 2018, former president Andres Manuel Lopez Obrador was a charismatic, old-school politician who developed a chummy relationship with Mr Trump.

The pair were eventually able to strike a deal in which Mexico helped keep migrants away from the border – and received other countries’ deported migrants – and Mr Trump backed down on the threats.

But Ms Sheinbaum, who took office on October 1, is a stern leftist ideologue trained in radical student protest movements, and appears less willing to pacify or mollify the president-elect.

However, it is not clear how serious Mr Trump’s threat is.

The US-Mexico-Canada free trade agreement forbids just imposing tariffs on other member countries.

And it is not clear whether the economy could even tolerate sudden levies on imports – car plants on both sides of the border rely on each other for parts and components, so some production lines could grind to a halt.

“It is unacceptable and would cause inflation and job losses in Mexico and the United States,” Ms Sheinbaum said.

Late Monday, Mr Trump said he would impose a 25% tax on all products entering the country from Canada and Mexico, and an additional 10% tariff on goods from China, as one of his first executive orders.

The tariffs, if implemented, could dramatically raise prices for American consumers. The US is the largest importer of goods in the world, with Mexico, China and Canada its top three suppliers, according to the most recent US data.

Mr Trump made the threats on Monday in a pair of posts on his Truth Social site in which he hit out against an influx of illegal migrants, even though apprehensions at the southern border have been hovering near four-year lows.