‘Liberation Day’—For Mexico – The American Conservative

While most of the world was left shocked and dismayed by President Donald Trump’s tariff roll-out on “Liberation Day” earlier this week, at least one foreign government was quietly celebrating.

“This is great for the country,” Mexico’s President Claudia Sheinbaum said the next day. Mexico and Canada, as part of the USMCA free trade agreement, avoided the imposition of any additional tariffs during Trump’s announcement Wednesday, while the average tariff rate on U.S. imports is set to skyrocket to 29 percent from just two percent previously.

While Mexico does still face a 25 percent on steel and automotive exports to the U.S., the country is not subject to any tariffs whatsoever on exports compliant with the USMCA. With immediate access to the massive import American market—the largest in the world—a relatively inexpensive labor force, and uniquely favorable terms of trade, Sheinbaum sees Mexico as well placed to be the largest beneficiary of the new American tariff regime.

“Today, Mexico has a preferential treaty,” Sheinbaum’s economy minister Marcelo Ebrard said Thursday, pointing gleefully to a map illustrating the effects of Trump’s liberation day speech, showing the entire world painted red except Mexico and Canada.

“The U.S. has 14 free trade agreements, but the only one to which tariffs were not applied is the USMCA; all the rest received tariffs,” Ebrard noted. “The strategy laid out by President Sheinbaum has been that Mexico needs to achieve a preferential treaty, that is, that we have better conditions to compete… such that Mexican exports are more competitive than any other country. And this plan laid out by President Sheinbaum is working.”

Sheinbaum and her supporters see this as the fruit of the president’s efforts to build a good working relationship with Trump. “This is because of the good relationship we have built between the government of Mexico and that of the United States,” Sheinbaum told reporters. “This has permitted Mexico to avoid having further tariffs imposed.”

Sheinbaum pointed to her careful handling of Trump’s earlier tariff threats as reasons for Mexico’s exclusion from the new tariff schedule. “If you recall, after my last call with President Trump I said that if it was the case that he imposed reciprocal tariffs there would not be tariffs [on Mexico], because as Mexico does not put tariffs on the U.S., the U.S. will not put tariffs on Mexico.” Despite some pressure, Mexico declined to implement retaliatory tariffs after Trump put in place a 25 percent tariff on Mexican steel, aluminum, automotives, and automotive parts.

Sheinbaum has also been very cooperative with the United States on matters of immigration and drug trafficking, sending 10,000 troops to police the border, seizing large amounts of fentanyl bound for the U.S., and extraditing 29 cartel leaders already imprisoned in Mexico to face justice in the U.S.

Now Sheinbaum’s skillful political maneuvering looks to be paying off. Mexico is the United States’ second largest import market after China, and with the imposition of major tariffs on China and many of the U.S.’s other largest trade partners, stands to benefit massively from the new economic order. Sheinbaum’s Plan Mexico called for reducing imports from China and increasing foreign investment into export-oriented industries, and, if no significant changes in the White House’s tariff plans are announced, Mexico will probably become one of the most promising places in the world for industrial investment, particularly for countries looking to relocate their supply chains out of China.

And Sheinbaum isn’t done yet. Ebrard is headed to Washington next week to work on negotiations that could reduce tariffs on Mexican-assembled automobiles by accounting for U.S. manufactured parts. The president even hopes she can get Trump to lower his tariffs on Mexican steel and aluminum.

The world is still grappling with the new economic order being hashed out at Washington—a return to protectionist measures not seen in the U.S. since the 19th century. Economists are unhappy, American stock markets are dropping, and foreign economic ministers are trying to scrape together deals that might grant them more favorable trade terms with the U.S. But south of the border, things are looking bright for Mexico.