Trump’s tariff threat could hamper Mexico’s growth into 2027, J.P. Morgan warns 

U.S. President Donald Trump’s latest tariff menace and its imaginable interaction connected adjacent year’s mandatory revision of the U.S.-Mexico-Canada escaped commercialized statement (USMCA) could widen Mexico’s economical uncertainty into 2027.

According to J.P. Morgan economist Gabriel Lozano, the reappraisal of the USMCA mightiness not beryllium arsenic regular arsenic antecedently thought, and this could hamstring concern decisions for different 2 years. 

Mark Carney says USMCA is simply a ground for a broader talks connected commercialized and that it volition person to change, and that Trump has taken vantage of woody with the tariffs. pic.twitter.com/llyNvFvLRt

— Courtney Theriault (@cspotweet) May 6, 2025

“Our baseline script is that the USMCA reappraisal volition statesman successful October arsenic scheduled,” Lozano told the paper El Economista. “But we’re already opening to spot a hazard that … the imposition of recurring tariffs could mean we mightiness not person an statement until 2027.” 

This unpredictability prompted J.P. Morgan to support its forecast of 0% maturation this twelvemonth for Mexico and conscionable 1% maturation adjacent year, Lozano said. Other reputable forecasters springiness akin figures of 0.1% and 0.2% maturation this year.

“We are anticipating a comparatively mean betterment and a mediocre maturation rate,” helium said, adding that this calculation does not yet instrumentality into relationship the interaction that the draconian U.S. migration argumentation volition person connected remittances.

Increasingly monolithic deportations volition straight interaction user spending successful Mexico, Lozano said.

A unsafe precedent?

Kenneth Smith, a spouse astatine the Agon-Economía/Derecho/Estrategia consulting steadfast and Mexico’s main negotiator during USMCA talks successful 2017-2018, agreed with Lozano’s comments astir the treble stroke of tariffs and the USMCA revision.

During a treatment sheet organized by the Mexican Institute for Competitiveness  (IMCO) this week, Smith said the U.S. is mounting a unsafe precedent with the “temporary” tariffs Trump has employed this year.

Mexico presently faces 3 types of U.S. tariffs that already impact cardinal sectors.

Since Trump took bureau connected Jan. 20, Mexico has had to woody with 25% tariffs connected products that don’t conscionable USMCA rules of origin, selective levies connected the automotive assemblage and 50% tariffs connected alloy and aluminum. 

Now President Claudia Sheinbaum is dealing with the imaginable imposition of an across-the-board 30% tariff opening Aug. 1.

Smith warned that the tariffs imposed by the United States connected Mexico could go the caller instauration of the USMCA, suggesting U.S. negotiators could question to marque the tariffs permanent.

“The tariffs being applied arsenic impermanent measures could extremity up being incorporated arsenic imperishable rules during the pact review,” Smith warned.

Mexico’s car manufacture is preparing for conscionable specified a scenario, according to Odracir Barquera, president of the Mexican Automotive Industry Association (AMIA).

“We can’t beryllium definite of the U.S. posture yet,” helium told the Cluster Industrial website, “but indications are it volition diagnostic an aggressive, unilateral strategy.”

Barquera said helium wouldn’t beryllium amazed if the U.S. seeks to importantly hike the determination contented requirements. He besides suggested labour requirements could beryllium stiffened. Originally conceived arsenic a regular review, adjacent year’s USMCA revision could go a model for profound changes, Smith warned, recalling that Mexico and Canada fought to destruct a “sudden death” clause. Such a proviso would person allowed immoderate of the 3 participating nations to terminate the statement astatine immoderate time.

The commercialized tensions resulting from Trump’s assertive tariff argumentation person already outgo Mexico tremendously, according to the U.N.’s Economic Commission for Latin America and the Caribbean (CEPAL).

CEPAL’s Marco Llinás, citing information from Mexico’s cardinal bank, told the paper La Jornada that the uncertainty caused by the tariff threats apt resulted successful a 21% driblet successful overseas nonstop concern during the archetypal 4th of 2025.

CEPAL’s enforcement secretary, José Manuel Salazar-Xirinachs, said U.S. protectionist commercialized argumentation could unit Mexico to importantly diversify commercialized relations. Currently, 80% of Mexico’s exports are shipped to the United States.

With reports from El Economista, El Financiero, Cluster Industrial and La Jornada