Mexico believes it can reach a deal with US president Donald Trump after he said he would impose 30pc tariffs on goods imported from Mexico beginning on 1 August.
Over the weekend Trump made public on his social media platform a letter sent to Mexican president Claudia Sheinbaum on Friday, threatening the new tariffs. The move could significantly disrupt crude flows from Mexico to the US, and refined product flows from the US to Mexico.
Mexico's ministries of the economy, foreign affairs, finance, security and energy said in a statement Saturday that they met with their US counterparts on Friday to begin negotiations to head off the new tariffs before 1 August. The Mexican ministries called the new tariff plan "unfair treatment."
With the working group— created by the US State Department — leading the talks, Sheinbaum said today she trusts a deal can be made before 1 August.
It is not clear if the 30pc tariff threat applies to trade currently covered by the US-Mexico-Canada trade agreement (USMCA). A White House official said previously that a 35pc tariff against Canada would not include USMCA-covered trade, but that those terms could change.
Mexico also has a plan should no deal be reached, Sheinbaum said, without specifying details. When previously threatened with tariffs, Sheinbaum discussed plans to bolster Mexico's economy to become more resilient in the face of disrupted trade with its top trade partner, as well as unspecified retaliatory tariffs.
But Trump vowed to raise the tariffs even higher if Mexico was to retaliate with its own measures.
In his initial letter to Sheinbaum, Trump repeated previous justifications for higher tariffs by pointing to Mexico's "failure" to stop criminal groups from smuggling fentanyl into the US. Trump recognized that Mexico is working on the issue but does not consider these efforts fruitful: "Mexico has been helping me secure the border, BUT, what Mexico has done is not enough," Trump wrote.
Trump sent a similar letter threatening tariffs on Friday to European Commission president Ursula von der Leyen. The US has clinched only one limited trade deal, which keeps in place a 10pc tariff on US imports from the UK while granting a lower-tariff import quota for UK-made cars. Trump has announced a deal with Vietnam, setting tariffs at 20pc.
