I’m just here for the drama

Tariff beef, magical realism & Xmas events

Author

Rocio Lucero
November 28, 2024

Hola amigos! 🦃

Happy Thanksgiving to my American readers! I hope you’re indulging in all the comfort foods and taking a moment to give thanks for the good stuff in your life.

In today’s edition, we’re unraveling the rising trade tensions between the U.S. and Mexico, all set against the backdrop of the incoming Trump presidency. Tariffs, the USMCA trade deal, and some spicy rhetoric are at the center of it all. Stick around to find out how these factors could shake up the future of North American trade—and what’s really at stake for both countries.

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Let’s dive in.

TOP NEWS

Rebelde cat fight

Trade Beef, Tariff Threats and USMCA Drama 

Trade tensions between Mexico and the U.S. are escalating as President-elect Trump threatens a 25% tariff on Mexican and Canadian exports. Mexico’s President, Claudia Sheinbaum, responded sharply, vowing to match any tariffs dollar for dollar and urging a focus on cooperation rather than threats.

Tell me more.

On Monday, Trump used Truth Social to declare that the tariffs would remain in place “until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” In a follow-up post, he added a threat of an additional 10% tariff on Chinese imports, blaming Beijing for the flow of fentanyl into the U.S. via Mexico.

If implemented, the tariffs would breach the United States-Mexico-Canada Agreement (USMCA), a trade deal that Trump himself negotiated and signed in 2020, replacing NAFTA. The USMCA establishes rules to reduce trade barriers among the three countries and includes dispute mechanisms to resolve violations. The deal also ties significant industries—like automotive manufacturing—into an integrated supply chain that would be severely disrupted by sweeping tariffs.

This isn’t the first time Trump has used the threat of tariffs as leverage. In 2019, he demanded Mexico take stronger action to curb migration, threatening a 5% tariff on all Mexican imports. Mexico responded by deploying troops to its borders, narrowly avoiding the tariffs. Whether Trump’s current threats are serious or another negotiating tactic remains unclear.

Let’s unpack this.

At her morning press conference, Sheinbaum took a firm stand. Reading aloud a letter she sent to Trump, she pointed out the shared but unequal consequences of drug demand and violence. “We don’t produce the weapons; we don’t consume the synthetic drugs,” she wrote, urging Trump to prioritize dialogue over threats. She emphasized that North America’s strength lies in cooperation, not division.

Sheinbaum also sent a letter to Canadian Prime Minister Justin Trudeau, addressing claims about Chinese investment in Mexico’s auto sector. She clarified that Chinese investment is minor—just $590 million since 2006—compared to the over $33 billion invested by U.S. and Canadian companies in the same period.

Meanwhile, the peso took a hit as news of Trump’s threats spread. Economists are warning that if the tariffs go through, Mexico’s economy could spiral into recession. Gabriela Siller, Banco Base’s economic analysis director, predicts a gradual departure of foreign companies.

The impact wouldn’t stop at the border. Economy Minister Marcelo Ebrard warned that 400,000 U.S. jobs—particularly in the auto sector—could be at risk. “A 25% tariff is a tax,” he said, stressing the importance of maintaining the integrated North American supply chain outlined in the USMCA. Fragmentation, he warned, would hurt all three economies while giving other global blocs a competitive edge.

What does this mean?

Sheinbaum and Trump spoke on Wednesday, a day after his tariff threat rattled markets. Despite their differing takes—Trump touting measures to "effectively close our Southern Border" and Sheinbaum emphasizing "building bridges, not closing borders"—both leaders expressed a willingness to cooperate. "It was a good conversation, and we are going to keep having conversations," Sheinbaum said. Trump described the call as “wonderful” and “very productive.”

With just 53 days until Trump takes office, some experts remain skeptical. The American Society of Mexico summed it up bluntly: “Mexico has the most to lose” if a trade war erupts. Yet, any prolonged dispute would reverberate across the region, damaging industries and jobs in all three USMCA countries.

The real question is whether this is genuine policy or another Trumpian gambit to score early political points. Either way, buckle up—this trade drama is just getting started.

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CULTURE & HAPPENINGS
ODE TO MEX

This section showcases my love of Mexican art, films and music. I offer a handpicked recommendation to deepen your connection with this magical country and its people.

If you're a fan of magical realism, be sure to check out the movie adaptation of the iconic Mexican novel Pedro Páramo. The film brings Juan Rulfo’s surreal, haunting tale to life with a stunning visual interpretation of the book’s dreamlike narrative.

Also, don’t miss Salma Hayek’s short HBO series Like Water for Chocolate, which is based on Laura Esquivel’s beloved novel. This adaptation weaves together the magic of food, love, and tradition with a rich tapestry of magical realism. Both works embrace the genre’s unique ability to blend the fantastical with the everyday, offering a captivating glimpse into Mexican culture and storytelling.

VIRAL VAULT

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