The charging of a 10 percent tariff on what is made in Mexico in the United States is not the end of the world, but it is necessary for Claudia Sheinbaum’s government to begin to see other economies and sign trade agreements with nations like South Korea, he considered. Arturo Fernández, rector of the Autonomous Technological Institute of Mexico (ITAM).
“I made some calculations for your peace of mind: A 10 percent tariff on Mexican imports (to the United States), of course it would affect us, but it would not be the end of the world either, in the short term there will be disruptions that would be lessened by a devaluation moderate peso,” he said at the opening of the Economic Perspectives 2025 Seminar.
The depreciation of the exchange rate will have a depreciation against the dollar, which is quoted at 20.60 pesos at the beginning of the exchange day, he explained.
The manager added that in the long run, due to reasonable assumptions about the impact and volume of trade, its cost would fluctuate between 1 and 2 percent of the gross domestic product, mainly due to the deterioration of the terms of trade.
“For 1 percent of the cost, as a proportion of gross domestic product, it would be with a deterioration of 5 percent and the cost of 2 percent of GDP with a deterioration of 10 percent in terms of trade,” he commented.
If the 10 percent tariff is applied to all nations, the impact on Mexico would be much smaller, he said.
“We must not forget the greatest damage is the one that we can inflict on ourselves, for example that due to exacerbated nationalism circumstances lead us to closing the economy to international trade and it would be a serious mistake. I suggest that you start talks to sign trade agreements with South Korea and other economies in the world, that is, open other doors,” said the rector of ITAM.
The situation in Mexico is delicate in the face of the threats of Donald Trump 2.0, because it is a negotiating strategy to an ideological sentence.
“I hope it is the first, because if there is rationality, as the interests of Mexico and both countries coincide to a large extent, then the USMCA should be maintained.”
If the USMCA is maintained, the Mexican economy would be strengthened and could be favored by the unfair application of higher tariffs to the rest of the world, he commented.
For the specialist, if Donald Trump, president-elect of the United States, keeps his tariff promises, a trade war will break out in the world.
“If Donald Trump follows through on his threats, he will disrupt the supply chain and spark a trade war,” he explained.
The imposition of tariffs by the United States government on exports made by friendly and enemy countries will strengthen the price of the dollar, the tariffs will improve the terms of trade to the detriment of the rest of the world; a deterioration in terms of exchange is that we sell at a lower price, he added.
China and the European Union, the largest economy, can respond with the imposition of tariffs, Donald Trump’s mercantilism unduly reflects his concern about trade deficits, which he considers as a warning of exploitation, he said.
“The hairdresser suffers a trade deficit, since he sells his services and does not buy anything from him. In my case, for obvious reasons, the balance of the trade balance with hairdressers is zero,” said the rector of ITAM.
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