Mexico: Sacrificing Migration Accessibility to Maintain Trade Security
Source: National Geographic
Written by: Madison Hugo
Edited by: Aurora Hu
After the Trump administration took office earlier this year, on February 1, 2025, the White House announced that it would impose a 25% tariff on imports from Mexico and Canada. The preexisting USMCA Agreement grants the three North American Countries preferential treatment regarding tariff agreements to promote trade across all three countries. Yet, when the Trump Administration imposed this, they simultaneously granted Chinese imports just a 10% tariff, thus directly contradicting the agreement. The justification? The fentanyl crisis and illegal immigration. Trump invoked a 1977 Law, granting the state the power to reestablish tariff legislation during times of “economic emergency.” By deeming the migration and fentanyl trafficking threats to the United States' economic security, he was able to raise import taxes by 15% on the two countries with which the U.S. has had trade allyship for years.
To defuse the heating tensions between the U.S. and the two other North American countries, Canada and Mexico have no choice but to pour resources into patrolling their borders. As for Mexico, the White House has put additional pressure on the country to apply steeper tariffs on Chinese imports into the country. For a number of years, China has imported a large portion of its vehicular and electronic devices into Mexico at a lower taxation percentage, and subsequently, Mexico sends them over the border to the U.S., for a total of much cheaper importation than directly from China to the United States. Mexico hopes to also get clarity on its steel trade, as both administrations have reached an agreement on 90% of tariffs, but struggle to align on Mexico’s steel trade.
The USMCA has provided the region with a 6% international trade increase since its inception, and losing the agreement would give other continental powers, especially China, the upper hand. Trade wars across North America will have a profound impact over time. If tensions continue between the three countries, the first to suffer will be Mexico. Mexico’s economy relies heavily on exports to the United States, and therefore, its economy will be the first to suffer. But eventually, the entire supply chain of North America will become less competitive and will struggle to keep up with the rest of the world. Ultimately, none of the countries can sustain themselves in the global market without having an agreement like USMCA to give them the upper hand.
The Asia-Pacific Economic Cooperation Forum (APEC) was meant to be a pivotal moment in reaching an agreement between the United States and Mexico regarding USMCA, but no agreement was reached. Instead, the U.S. reached an agreement with Canada, specifically regarding industrial resources. Mexico and the United States still do not have an agreement. Excluding Mexico from trade agreements could have a potentially negative impact on its trade.
If the countries fail to agree, it could pose problems for the future of North American trade. Trump has been hinting at rethinking USMCA in its entirety, which is set to be renewed in 2026. Embedded in the original plans of the agreement is the intention that it prioritizes the economic benefit of the United States over Canada and Mexico, primarily through the caveat that the United States never be forced to import more than they were exporting. If Trump decides the United States is not benefiting enough from the USMCA Agreement, he may not renew the law. So far, Mexican President Sheinbaum’s administration has held over 80 meetings with the White House to settle the trade disagreement, and no agreement has been reached.
