Mexico: Sheinbaum announces counter-measures against Trump tariffs

Mexican President Claudia Sheinbaum announced on Wednesday evening a package of trade counter-measures against the tariffs that President Donald Trump’s administration has imposed on Mexico’s auto industry and agricultural goods. The measures cover tariffs on US textiles, steel and selected agricultural goods, with a fourteen day window for application.

The announcement follows an emergency cabinet session and consultations with Economy Minister Marcelo Ebrard. For Serbia, which in May followed Trump’s waiver extension on Russian oil and his statements on trade ties with Brussels, the Mexican counter-measures are a signal of how a mid sized economy responds to unilateral US tariff decisions.

Scope and structure of the counter-measures

The proposed package covers three categories of tariffs. The first applies to US steel and aluminium at a rate of ten percent. The second covers agricultural goods, primarily corn, soybeans and chicken, at fifteen percent. The third category covers textiles and footwear at twelve percent.

The total value of goods covered by the counter-measures reaches around eighteen billion dollars, roughly half of US exports to Mexico in the categories affected by Trump’s tariffs. President Sheinbaum said the final amount will be aligned with Washington’s decisions in the coming days.

Our policy is not retaliation but the protection of Mexican workers and producers, Sheinbaum said in her Wednesday evening address from the National Palace in Mexico City.

Positions of Canada and Brussels

Canadian Prime Minister Mark Carney announced on Tuesday that Ottawa is preparing its own package of counter-measures, which could be aligned with Mexico’s. The three North American partners are using the USMCA mechanism for consultations, which began in Ottawa on Tuesday morning.

Diplomatic activity around the counter-measures includes:

• consultations between Minister Ebrard and Canadian counterparts in Ottawa
• a video link conversation between Sheinbaum and Carney on Wednesday
• preparation of a joint Mexican and Canadian non-paper
• consultations with Brazil on a regional response
• a meeting between Mexico’s ambassador in Brussels and Commissioner Sefcovic

EU Trade Commissioner Maros Sefcovic said Brussels is following the situation as a test of trade policy under Trump’s second administration. Competition Commissioner Teresa Ribera is running parallel consultations with European industry associations.

Trump’s reaction

The White House said on Wednesday evening through spokesperson Karoline Leavitt that Trump “does not accept threats” and that any Mexican counter-measures could lead to “additional US measures”. The President called Mexico’s plans “a bad move that will harm Mexico itself” in a statement on the Truth Social network.

The United States imposed twenty five percent tariffs on Mexican vehicles and components in March, citing migration and security grounds. Trump extended the tariff period by another ninety days in May, part of a pressure strategy on the Sheinbaum government over border security.

Implications for Serbia and the region

Belgrade has issued no official reaction to events in North America. Diplomatic sources say the Foreign Trade Ministry is monitoring the situation as an observer, focused on the effects that possible tariffs would have on commodity and agricultural prices on global markets.

Hungary, which holds the Visegrad Group chair, announced the topic will be added to the agenda of the heads of government meeting in June. Hungarian Prime Minister Viktor Orban said on Tuesday that Hungary “understands” the US position, but that an escalation of trade tensions could have consequences for European economies.

What comes after the deadline

The deadline for Mexico’s counter-measures expires on June 12. Before that date another round of USMCA consultations is expected, scheduled for June 7 and 8 in Ottawa. Sheinbaum said the final decision will depend on the outcome of the talks and on the evolution of the US position.

After the deadline expires, the USMCA mechanism provides for a formal thirty day consultation phase, followed by arbitration. Past experience shows arbitration lasts between nine and eighteen months, leaving room for bilateral deals in between.

Will Sheinbaum and Carney manage through the USMCA mechanism to draw Trump into bilateral talks, or will North America enter its first real trade crisis since the 2020 revision of the agreement?