Trump’s decisive win brings more uncertainty to Mexico
Republican presidential nominee and former U.S. President Donald Trump gestures as he holds hands with his wife Melania during his rally, at the Palm Beach County Convention Center in West Palm Beach, Florida, U.S., November 6, 2024. REUTERS/Brian Snyder
Donald Trump’s victory in the US presidential election is a sobering and uncertain moment for Mexico’s President Claudia Sheinbaum. But she’s got one small reason to exhale. On Tuesday, just hours before Trump’s win, Mexico’s Supreme Court tossed out a major challenge to her coalition’s judicial reform. It’s a ruling Sheinbaum and her Morena party welcomed. The reform solidifies Morena’s now cast-iron grip on power, which had been under scrutiny from some in the US. Kamala Harris might have used the upcoming USMCA review to push back on that reform and others like it. Trump, though? That’s unlikely.
That’s about where Sheinbaum’s luck runs out. Trump just became the first Republican to win the popular vote in two decades. He’s millions of votes ahead of his rival as of publication. This election result isn’t just a win for Trump; it’s a mandate. A big green light from the American public to charge ahead with his agenda, which contains plenty to make Mexico nervous.
Mexico did okay during Trump’s first term. It managed to benefit from his trade war with China, and USMCA was a largely benign update to NAFTA. But Tuesday night, as a Trump victory became more likely, the Mexican peso (formerly the “superpeso”) plummeted. That underlines how challenging a second Trump term is likely to be for Mexico.
One clear reason is that Trump’s rhetoric on Mexico has turned even tougher. He closed his campaign on Monday by vowing to “immediately impose” a 25% tariff on “everything Mexico sends to the United States.” That’s a significant threat. Mexico is currently the United States’ largest trading partner. A sweeping tariff could wreck that relationship—and Sheinbaum’s team knows it. Maybe they hope Trump is bluffing. But banking on a bluff from a man with a mandate to deliver is risky. They’d better have a backup plan. If Trump sticks to his guns, Mexican auto manufacturing, a critical piece of the economy, could be crushed overnight. That would be a huge blow to Sheinbaum’s nearshoring agenda and her hope that manufacturing growth will fund her big domestic plans.
The Mexico-US relationship is Mexico’s most important, bar none. Sheinbaum will put on a brave face. She will no doubt send a delegation to sit down with Trump’s transition team and try to establish a working programme. She’ll probably also clamp down on migrants transiting the country even further. Sheinbaum’s already signalled she’ll try to “educate” Trump’s team about Mexico’s existing efforts on this front. She may hope that will all be enough to placate the new administration. Given Trump’s mandate, that’s a big hope.
Sheinbaum faces an expensive agenda and a near-record deficit, with stalled nearshoring progress. If Trump follows through on his pledges, the impact on Mexico will be severe. It will add further strain to Mexico’s economy and even more complexity to Mexico's many pre-existing challenges. Trump’s victory does more than challenge Sheinbaum’s plans—it potentially upends the viability of Morena’s entire project.
That’s why, to avoid worst-case fallout, she’ll need all hands on deck. That means shoring up Mexico’s depleted foreign service fast, collaborating closely with the private sector, and dropping the divisive tactics that have defined her first month. But the bad blood between Morena, opposition parties, and sections of the business community runs deep. Mexico is bracing for the uncertainty of Trump 2.0. Sheinbaum has to find a way to mend fences in order to protect Mexico’s interests. It won’t be easy, and it isn’t a given she’ll even try, but it’s the only hope she has of avoiding outright calamity.