An additional depreciation of the exchange rate plus the costs of Trump’s tariffs passed on to consumers would generate inflationary pressures, which would not be offset by lower productive activity associated with lower Mexican exports, according to Citibanamex.
The above could imply that the monetary policy target rate remains in restrictive territory for longer, which would negatively impact the growth of the Mexican economy, according to a report from the financial group published this Tuesday.
Citibanamex pointed out that tariffs on Mexico would reduce shipments since 81% of sales of goods abroad are destined for the United States.
Read: Trump chooses US trade representative to implement tariff policy
He added that the depreciation of the peso, already observed since Trump’s victory and the additional one that may be registered, would moderate the impact, as would a decrease in the profit margins of exporters from Mexico and importers from the United States.
“However, it is foreseeable that the net effect will be negative on Mexican exports,” he noted.
This morning, President Claudia Sheinbaum published a letter that she sent to the next president of the United States, where she points out that it is not with threats or tariffs that the migration phenomenon or drug consumption in that country will be addressed, but rather that it requires cooperation and reciprocal understanding.
“To one tariff, another will come in response and so on until we put common businesses at risk,” he noted in the text.
Read: Trump does not plan to exempt oil imports under new tariff plan: Reuters
On this last point, Citibanamex considered that despite its vagueness regarding the magnitude of said tariffs, compliance with the threats would affect 40% of imports, which is what those coming from the United States represent.
He added that Trump’s imposition of tariffs would make goods from the affected countries more expensive in the US market.
Citibanamex maintained its estimate for Mexico’s GDP in 2025 at a marginal 0.2%, a forecast it published after the Republican’s victory.
Read: Base warns of possible recession in Mexico if Trump’s 25% tariff is finalized
However, he clarified that the uncertainty factor included in this economic forecast does not consider the effects of the materialization of threats, particularly tariffs on Mexico or another country.
He noted that if any of these threats materialize, he would evaluate the potential impacts for the Mexican economy.
“However, the pronouncements expressed yesterday and today raise the probability of seeing a tariff war, which biases downward our estimated GDP growth trajectory, and upwards those of inflation, exchange rate and interest rates of the coming years,” he predicted.
Follow us on Google News to always stay informed
