U.S. President Donald Trump continues to roil global markets with his tariff plans — which are expansive to say the least.
Currently, though Trump is known to change his mind, those tariffs stand at 25% for all imported goods from Mexico. He has also pointed to America’s southern border as a problem spot for both illegal immigration and the trafficking of drugs, like fentanyl.
Beyond the immediate political impacts of such tariffs, there are also economic concerns.
Mexico and America have a long trade history
The U.S., Mexico and Canada have been free-trade partners for a long time. It started with the North American Free Trade Agreement back in 1992, and continued in 2020 under the U.S. – Mexico – Canada Agreement, though there are some tweaks.
At the core of NAFTA and USMC is that it bolsters all countries’ economies.
So here’s what we import from Mexico — and how you could take a hit.
Gas is going to cost more
Plenty of people presume that American crude (no pun intended) comes from the Middle East, but that isn’t true. Canada is the largest exporter. And Mexico is right behind it.
So if you have a 25% levy, as well as retaliatory tariffs from both countries, your wallet is gonna feel it the next time you need to gas up.
Cars, and car parts, could get very expensive
According to the Mexican government, vehicles and car part exports account for more than $130 billion. In fact, a whole load of “American” cars, as well as international brands, are put together in Mexico.
That includes Audi, Ford, and General Motors.
So now you can look forward to pain at the pump and the dealership — as if that wasn’t happening already.
Electronics were already expensive — expect worse
Just behind your car parts come the things that you enjoy in your living room. That means your TV, your computer and your stereo.
Enjoy the good tunes while you can.
Mexico claims to have exported north of $66 billion in computer and electrical equipment.
Bevs, baby
Well, we all knew this one was coming. While Mexico lists “beverages” as an $11.5 billion export, we know not to swallow the worm.
Joking aside, Fomento Económico Mexicano, S.A.B. de C.V., otherwise known as FEMSA, operates the largest independent bottling plant for Coca Cola. They employ more than 200,000 people. They’re the fifth-largest company in Mexico. And when that tariff hits, you’re probably not going to feel that “magic” anymore.
Appliances aren’t spared under tariffs
You can’t underappreciate the value of seemingly small things.
The $10.3 billion in imports when it comes to appliances include essential equipment for maritime, aviation, medical, and other industries. Stuff like gauges, clocks, and monitoring devices are shipped from Mexico to U.S. hospitals, manufacturers, and labs.
These imports also reach everyday households, supporting various technologies and daily operations across the country.
Bottom line
President Trump’s proposed 25% tariffs on Mexican imports could have major economic consequences.
Mexico is a key U.S. trade partner, supplying essential goods.
Gas prices could rise since Mexico is a major crude oil supplier. Cars, electronics, and appliances may become pricier, with Mexico exporting billions in auto parts and technology. Beverages, including Coca-Cola products, and essential equipment for industries like aviation and medicine would also be affected. If tariffs go into effect, expect higher costs across the board — from the gas pump to the grocery store.
