Claudia Sheinbaum speaks during the daily press briefing at Palacio Nacional in Mexico City on July 10. Photographer: Juan Abundis/ObturadorMX.
Mexican officials were taken aback by President Donald Trump’s latest tariff threat after paying frequent visits to his top aides in Washington to convince him their efforts to fight drug trafficking were paying off.
For months, U.S. officials have been effusive about Mexican cooperation on issues related to the border and security. “Very responsive,” raved Secretary of State Marco Rubio. “Positive momentum,” Treasury Secretary Scott Bessent called it. Then, on Saturday, Trump blasted the Mexican government’s efforts in a letter threatening 30 percent tariffs on imported goods from the country starting August 1. “What Mexico has done is not enough,” he wrote. “Mexico still has not stopped the cartels.”
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Mexican President Claudia Sheinbaum has repeatedly pledged “a cool head” to deal with Trump’s tariff threats, but a sense of exasperation swept over people involved in the U.S. negotiations, according to people familiar with the talks. Their cordial approach suddenly seemed to have yielded little—for now.
Sheinbaum and her team are looking to persuade Trump that Mexico and the United States are complementary economies, and that Mexico is willing to cooperate against cartels in unprecedented ways, added the people, who asked for anonymity to discuss internal deliberations. Sheinbaum insists that Mexican and U.S. officials have a working plan in place, which she expects will allow them to reach a tariff deal before August 1. “If not, we also have our plan,” she told reporters on Monday, without offering details.
Trump’s threat of a 30 percent tariff rate, with exceptions for products certified under the trilateral trade agreement between the two countries and Canada—the U.S.-Mexico-Canada Agreement (USMCA)—is unlikely to drastically move the needle beyond the 25 percent rate already in place, according to Bloomberg Economics. Nearly 83 percent of U.S. imports from Mexico were exempt from tariffs in May, mainly due to exemptions on USMCA–compliant goods.
But Trump’s 30 percent threat isn’t much better than the 35 percent rate he announced for Canada, which has taken a much more confrontational tone with Trump while Mexico played nice.
Some U.S. officials tried to suggest that cooperation could continue despite the letter. U.S. Ambassador to Mexico Ronald Johnson said Saturday in Mexico City that Sheinbaum and Trump have a “wonderful relationship” and no partnership should be easier than between their two countries. “America First doesn’t mean America alone. In fact, I’m here in Mexico with my arms open in friendship with a message of true respect for the sovereignty of Mexico,” he said at a tuxedo-filled gala thrown in his honor and attended by many from Mexico’s political, business, and media elite.
In a social media post on Sunday, the U.S. diplomat hailed “permanent collaboration and mutual trust” between the two neighbors, providing a glimmer of hope that a negotiated deal might still be reached.
Sector-specific tariffs, including on steel and soon on copper, gave Mexico reasons to appeal to Trump officials in recent weeks for a deal as it seeks to protect its position as the United States’ top trade partner in the world. It had shielded part of its export industry by negotiating to have a previously announced auto duty limited to the non-U.S. portion of cars.
“Mexican authorities will likely continue to engage constructively with the U.S. administration on border control and, to some extent, also by hardening the stance against the drug cartels and the flow of fentanyl into the U.S., in order to preserve access to the U.S. market under competitive conditions,” wrote Alberto Ramos, head of Latin American economics at Goldman Sachs Group Inc., in a note.
Mexico’s peace offerings have included the extradition of dozens of high-profile detainees involved in the drug trade and an increase in busts along drug routes. Its security minister has been one of the visitors in the Washington talks, and on the domestic front, the government has pushed for legislation to increase investigations of unsolved crimes. But ties have also been strained in recent weeks by the U.S. announcement of a move to cut off three Mexican financial firms over potential involvement in money laundering for drug cartels.
Sheinbaum noted on Monday that U.S. officials are aware of progress Mexico has made on security, especially on fentanyl trafficking, but added that the U.S. must also comply with the reduction of arms trafficked into Mexico.
For now, Mexico is staying the course. The Economy Ministry said in a statement on Saturday that Minister Marcelo Ebrard had been in Washington since Friday for negotiations with the White House, as well as with U.S. trade officials, and that Mexico would defend its interests. The ministry called Trump’s latest tariff threat “unfair.” Mexico will work to find “an alternative that allows us to protect businesses and jobs on both sides of the border,” the ministry said.
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