Mexico Proposes Alternatives Amid US Tariff Threats, Considers Retaliation

As President Donald Trump threatens to impose tariffs ranging from 15% to 50% on various countries starting August 1, Mexico has proposed an alternative plan to the United States aimed at reducing trade deficits without harming exports or nearshoring efforts. Mexican President Claudia Sheinbaum emphasized that many of Mexico's exports to the US are manufactured by US firms under the current USMCA agreement, which is set for review in 2026, and expressed hope for a negotiated resolution with US officials, potentially even speaking directly with Trump. In response to escalating tariff threats, Mexico is also quietly preparing trade retaliation options, including antidumping investigations on US chicken and pork, and legal measures related to US non-compliance with USMCA auto rules, though it currently favors negotiation to avoid damaging tightly integrated North American supply chains. Meanwhile, Mexico and Brazil are seeking to strengthen trade ties as they brace for the economic impact of new US tariffs. This situation unfolds amid a broader context of rising US protectionism, which challenges regional economic integration and underscores the importance of the upcoming USMCA review as an opportunity to adapt and reinforce North America's economic framework.