An intelligent and in-depth discussion of Trump's 2025 tariff threats and what they mean for Mexico's economy. On this episode of the podcast, host Nathaniel Parish Flannery speaks to Diego Marroquin Bitar, a North America researcher at the Wilson Center, a Washington DC-based think tank. Diego says that Trump's 25% tariffs, implemented on March 4, 2025, represent a "red light" level of risk for foreign investors considering making investments in Mexico. He also explains why Mexico's economy is so vulnerable to Trump's bullying. Exports account for over a third of Mexico’s GDP and over 80 percent of Mexico’s exports go to the US. On the other hand, US exports of goods to Mexico account for only about 1% of the US’s GDP. Although both countries benefit from cross-border commerce, the relationship is more important to Mexico than it is to the U.S. But, Diego also gives Mexico's President Claudia Sheinbaum an "A" for her effort in dealing with Trump so far. To many observers it still seems like it’s still unclear if Mexico can really make a deal with Trump. Are the tariffs just a tactic for bullying Mexico during broader negotiations? Or are we starting an improvised experiment with radically shaking up the global trade system? “Trump 1.0 used tariffs as a bargaining chip. I think right now more than just a concession extraction tool tariffs are being used to undermine Mexico’s nearshoring potential. I think this is something [Trump and his team] are doing on purpose. They are making manufacturing in Mexico less attractive vis-à-vis the U.S.,” Diego said. Even before the new tariffs went into effect Mexico’s economy was only expected to grow by around 1 percent. Executives at foreign companies are going to have to figure out how serious Trump really is about using tariffs as a long-term economic strategy. In the short-term, this new environment of unprecedented levels of uncertainty in the global economy will hurt investment in Mexico.

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“What did the council decide on item 42?” — answered with the speaker and the moment.

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