Mexico Already Feeling The Pinch Of Trump’s Tariff Threats

The Mexican government is already feeling the squeeze from President-elect Donald Trump’s threats to impose sweeping tariffs, with a major auto manufacturer now reconsidering its investment strategy in the country.

Mazda Motor Corporation, a major international auto manufacturer based in Japan, confirmed it’s reconsidering investments in Mexico until it receives clarification from the incoming Trump administration on threats to slap the country with 25% tariffs on all goods, according to Bloomberg. Trump, who has pledged to embark on a hardline illegal immigration crackdown, has threatened to hit both Mexico and Canada with tariffs unless their governments do more to stop the flow of illegal migration and illicit drugs into the U.S. 

“We want to continue investing in the country,” Mazda Mexico Director Miguel Barbeyto said to Bloomberg, but without any guarantees, “the truth is that it would not be a good business for Mazda Motor Corporation.”

“What happens if the United States government imposes tariffs? Well, we have a plan B. But we are working to continue growing in the country, both in manufacturing and in the sale of new vehicles,” Barbeyto continued. “We are confident in both governments, but above all, our government, the federal government in Mexico, that they will negotiate very well.”

The uncertainty began when Trump, fresh off his electoral landslide victory over Vice President Kamala Harris, declared on social media in November that he would be imposing 25% tariffs on Mexico and Canada unless their governments met his demands.

In response, Canadian Prime Minister Justin Trudeau immediately reached out to Trump to discuss the situation, and later said he “had a good call” with the president-elect. Trudeau soon afterward visited Trump at his Mar-a-Largo residence and detailed what more the Canadian government is doing to bolster border security.

In what was a much more antagonistic reaction to the threats, Mexican President Claudia Sheinbaum issued a public letter that gave the Mexican government credit for the drop in migrant encounters along the southern border and she blamed the U.S. for the number of guns in Mexico. Sheinbaum also notably warned that her government would have a “response in kind” if Trump moves forward with his threat to slap a 25% tariff on all Mexican goods.

“For every tariff, there will be a response in kind, until we put at risk our shared enterprises,” the leftist president said. “Yes, shared.”

Mazda doesn’t appear to be the only major manufacturer rethinking its presence in Mexico in wake of Trump’s tariff threats. Tesla, Stellantis and BYD have either stopped or openly reconsidered their plans in the country following the president-elect’s warning, according to Bloomberg.

The incoming president’s tariff threat is largely in line with his economic philosophy. The then-candidate described a tariff as “the most beautiful word in the dictionary” during an October interview, and his choice to serve as the next Treasury Secretary, Scott Bessent, has been a huge proponent of them.

The threat also toes the line with his hawkish immigration enforcement agenda, with Trump pledging to conduct the largest deportation operation in history, end birthright citizenship for those born to illegal migrant parents, resume border wall construction, hire more Border Patrol agents and a slate of other hardline proposals.

On the campaign trail, the Republican teased a universal tariff of up to 20% on all imports coming into the country and a 60% or higher tariff on all imports from China. Since his election victory, a number of companies have begun shifting production out of China in order to avoid paying the sweeping fees.