Mexico Wins from US Tariffs: The Wall Street Journal Report
- Mexico City. Mexico is the unexpected winner of the tariffs imposed by the president of the United States, Donald Trump, asserted the Wall Street Journal (WSJ).
- According to a report in the WSJ, economists and officials initially estimated that the Mexican economy would suffer "a devastating impact" due to the imposition of tariffs by...
- The WSJ noted that the tariffs imposed by the second Trump governance are the lowest compared to the rest of the countries that carry out trade with the...
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Mexico unexpectedly Benefits from Trump Tariffs: A Surge in Exports to the US
Table of Contents
- Mexico unexpectedly Benefits from Trump Tariffs: A Surge in Exports to the US
- At a Glance
- Initial Expectations vs. Reality: A Reversal of Fortune
- The Tariff Disparity: A Competitive Advantage
- Mexico’s growing Appeal as a Manufacturing Hub
- Trade Volume Projections: Reaching $900 Billion
- Case Study: Nearshore Co. and Reactivated Projects
- Economic Growth Forecasts: A more Optimistic Outlook
Mexico City. Mexico is the unexpected winner of the tariffs imposed by the president of the United States, Donald Trump, asserted the Wall Street Journal (WSJ).
Initial Expectations vs. Reality: A Reversal of Fortune
According to a report in the WSJ, economists and officials initially estimated that the Mexican economy would suffer “a devastating impact” due to the imposition of tariffs by the then-new government of the American Union in early 2025. However, time has shown that Mexican exports to the northern neighboring country have increased almost 9 percent in January-November compared to the same period last year.
The Tariff Disparity: A Competitive Advantage
The WSJ noted that the tariffs imposed by the second Trump governance are the lowest compared to the rest of the countries that carry out trade with the United States.This disparity has helped compensate for part of the gap left by Chinese products, which pay higher tariffs.
Essentially, Mexico’s lower tariff burden has made it a more attractive destination for manufacturers looking to avoid the higher costs associated with trade from other regions, particularly Asia.
Mexico’s growing Appeal as a Manufacturing Hub
The report emphasizes that Mexico continues to be attractive for producers to establish themselves, as it is geographically close to the United States, the manufacturing industry is low-cost, and the T-MEC, despite some deterioration, remains standing.
These factors combine to create a compelling surroundings for companies seeking to reshore or nearshore their manufacturing operations.
Trade Volume Projections: Reaching $900 Billion
Trade between the United States and Mexico is set to reach $900 billion by 2025, even despite high tariffs on automobiles – whose exports fell 6 percent -, steel, and aluminum.
| Sector | Tariff Impact |
|---|---|
| Automobiles | Exports fell 6% due to high tariffs. |
| Steel & Aluminum | subject to high tariffs. |
| Overall Trade | projected to reach $900 billion by 2025. |
Case Study: Nearshore Co. and Reactivated Projects
The WSJ referred to the case of Nearshore Co., a firm that helps foreign manufacturers produce goods that are headed to the United States in its 18 plants located in Mexico. According to Jorge González Henrichsen, co-executive director of this company, on April 2, Liberation Day, manufacturing projects that had been suspended due to the entry of tariffs were reactivated.
This reactivation occurred as Nearshore Co.’s customers concluded that Mexico was in a better situation than many other U.S. trading partners, including rival manufacturers in Asia.
Economic Growth Forecasts: A more Optimistic Outlook
The Bank of Mexico estimates a growth of 0.3 percent of the Mexican economy,