OECD Warns Mexico Faces Recession Risks from Proposed US Tariffs

The OECD has warned that Mexico's economy could face a recession by 2025 due to the potential imposition of 25% tariffs by the U.S., predicting a 1.3% contraction in GDP. This comes amid rising trade uncertainty and economic policy instability, impacting business confidence in both Mexico and the U.S. Mexican President Claudia Sheinbaum is adopting a nonconfrontational approach towards the U.S. administration, seeking dialogue to mitigate the impact of tariffs, especially given that exports to the U.S. account for 28% of Mexico's GDP. The OECD's projections indicate that while Mexico could see a slight growth of 0.1% in a moderate tariff scenario, the potential for a downturn remains significant without an agreement. Analysts suggest that Mexico's dependence on U.S. trade makes its economy particularly vulnerable to tariff-related disruptions. Sheinbaum's strategy emphasizes patience and dialogue, as the stakes for Mexico are high in this evolving trade landscape.