Trump’s Tariffs Could Disrupt Decades of U.S.-Mexico Economic Ties
For over 30 years, free trade has strengthened the relationship between the United States and Mexico, creating economic benefits and challenges.
A Growing Trade Network
In 1975, trade between the U.S. and Mexico was minimal. Dennis Nixon, a banker in Laredo, Texas, witnessed this firsthand. Today, nearly $1 billion in goods and over 15,000 trucks cross the border daily, making Laredo the busiest U.S. port. The economies of both nations are now deeply connected, with industries relying on cross-border trade for car parts, fuel, electronics, and produce.
“You cannot separate them anymore,” Nixon explained, emphasizing how trade agreements have built economic dependencies that often go unnoticed until disruptions occur.
Now, a major disruption is looming. President Trump has announced plans to impose a 25% tariff on Mexican imports, aiming to pressure Mexico into stricter immigration controls. Similar tariffs on Canadian and Chinese goods are also in the works.
Tariffs and Economic Consequences
Trump has long been a critic of free trade agreements, arguing that foreign imports harm American industries. His administration views Mexico as an economic competitor, particularly in auto and steel production. Many of his supporters believe these imports weaken U.S. manufacturers, pushing for a revision—or even elimination—of the United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA in 2020.
However, business leaders argue that U.S.-Mexico ties are much deeper than commonly perceived. Tariffs could severely impact industries, tourism, and family networks that span both countries.
“Our economies are so intertwined that it would take decades to separate them,” said Juan Carlos Rodríguez, a real estate executive in Tijuana. “Such a move would have a catastrophic impact on Mexico.”
A History of Economic Interdependence
Mexico’s trade dependence on the U.S. began in the 1960s when manufacturers moved production across the border to lower costs. This trend accelerated under NAFTA in 1994, increasing trade but also fueling debates over job losses in U.S. manufacturing towns. While some regions benefited from economic expansion, others suffered as factories relocated.
This discontent contributed to Trump’s rise as an anti-trade candidate. His advisor, Peter Navarro, has called NAFTA a “catastrophe” for both countries, arguing that it led to job losses in the U.S.
“The reality is, China was worse, but people forget how damaging NAFTA was,” Navarro said.
With new tariffs on the horizon, the future of U.S.-Mexico trade hangs in the balance. Any disruption could have long-term economic consequences for both nations, reshaping a relationship built over decades.