If President Donald Trump applies 25% tariffs to all Mexico’s products throughout the year, the national economy would stagnate and the most affected sector would be the manufacturing, according to the HR ratings qualifier.
“This preliminary estimate considers that the sector most affected by tariffs would be the manufacturing, as a result of the deceleration in exports and for the effects that this would have on the rest of the economy,” he said in an analysis published this Thursday.
The firm however trusted that a measure of that magnitude be temporary due to the damage that would make both the Mexican economy and the American.
“However, if this leads to the renegotiation of the Free Trade Agreement (TMEC) in 2026, this could have negative consequences for Mexico in the long term,” he said.
Lee: Trump insists on 25% tariffs to Mexico and Canada from February
HR Ratings foresaw three possible scenarios with respect to the potential commercial barriers that EU may impose.
In the first, EU imposes 25% tariffs on all products from Mexico permanently.
Our country could choose to impose 25% rates on all US products, or decide not to respond in the same way, although it could retaliate on other fronts, such as migration.
If Mexico decides not to respond in the same way to the US, the first impact would be an increase in the prices of all Mexican products consumed in that country.
“That is to say more inflation, although surely not 25%, because part of the initial cost would be absorbed by companies,” he said.
For Mexico, this scenario would mean lower exports, which would mainly affect the manufacturing sector and especially automotive, since the main sale of Mexico to the US is from parts and accessories of motor vehicles.
HR Ratings recalled that approximately 35% of all manufacturing that is exported from Mexico are automotive products.
He predicted that in the medium term, the imposition of tariffs under this scenario would result in a reduction in commercial transactions between both partners, which would end up harming the two countries.
A second scenario is that EU imposes tariffs of 25%, but only for a couple of months, so that the impact would be much less harmful to both economies.
The consumer price transfer in the US would be practically null, as American entrepreneurs absorb costs and decrease their profits for the time that tariffs are in force.
For Mexico, its exports would not be so harmed either because US firms would not have to look for a new supplier, but to absorb the impact of greater prices for a couple of months.
The third possibility planned by the qualifying agency is that 25% tariffs are imposed on a small number of products.
Under this scenario, the impact would be even lower, especially if the barriers focus on goods that do not directly affect the production chains of both countries.
After analyzing the three scenarios, HR Ratings indicated that it is evident that the most convenient for both economies is to achieve an agreement before February 1 to avoid the entry of tariffs.
“Contrary to the imposition of tariffs, the most prudent would be to unify and strengthen the commercial block of North America to maximize competitiveness, create efficient supply chains and face global challenges together,” he said.
Lee: Economy contraction presses Banxico more for the highest cut -rate cutting
The Mexican economy contracted in the fourth quarter of 2024 for the first time since the third quarter of 2021, which coincides with the beginning of the administration of Claudia Sheinbaum, according to timely and desestationalized data that Inegi made known this Thursday.
In all 2024 the Mexican economy grew 1.5%, a slowdown with respect to the expansion of 3.3% in 2023, according to original institute figures. The data for last year was located on the floor of the growth range planned by the Government, which was between 1.5% and 2.5%.
After the information of INEGI, the Ministry of Finance maintained its prognosis for the Mexican economy in 2025, which is a range that ranges between 2% and 3%.
Lee: Mexican economy contracts in fourth quarter from 2024 to 0.6%, according to the preliminary data of the INEGI; It would be the first drop since the 3T of 2021
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