But exporters in Mexico, the United States’ biggest trading partner, remain upbeat about the future of the $840-billion business relationship.
Mexico’s economy has gone from strength to strength on the back of the free trade agreements it has enjoyed with the United States and Canada since 1994.
The value of its exports to the United States now far exceeds that of its imports from its northern neighbor — a major bone of contention for Trump.
On Tuesday, the tariffs he announced on all Mexican imports shortly after taking office are due to go into effect, after being suspended for a month.
Mexican manufacturers, however, are not as worried as you might imagine.
Marco Antonio Lopez has experience when it comes to navigating economic upheaval, from the sudden devaluation of the Mexican peso in 1994 that sent the economy into meltdown to Trump’s first presidency, when the Republican threatened to pull the plug on the North America free trade deal.
In the end, the US leader renegotiated parts of the deal, but trade remains mostly tariff-free.
Lopez’s company SMK Electronica, based in the city of Tijuana on the border with the United States, manufactures electronic components for the automotive, audiovisual and telecoms industries.
The Tijuana region is home to hundreds of “maquiladoras” — factories that assemble imported parts into finished products for export, particularly to the United States.
“We have faced many crises. The previous Trump administration was not as drastic, but it was very similar and we learned to adapt,” Lopez said.
“The border industry is highly adaptable… and the investment is so great that there is no risk of it disappearing.”
The automobile industry is under particular threat from the impending tariffs.
A representative of an auto parts maker with operations in Mexico who did not want to be identified said that US-Mexico trade was too big to fail, but that tariffs could have an impact on production nonetheless.
“Products will become more expensive and there will be a clear loss in competitiveness,” the person told AFP.
Besides tequila and avocados, Mexico is one of the United States’ biggest suppliers of cars, car parts and mechanical and electronic equipment.
Free trade has made North America a seamless manufacturing platform, with products like car key fobs, which are assembled in Mexico, crossing borders on the continent several times during the manufacturing process.
The aerospace industry is another example: Mexican companies manufacture components for US partners such as Boeing and General Electric in the northern city of Monterrey as well as in the central state of Queretaro.
The mere development of a part for an aircraft engine can take between two and three years.
“Changing suppliers in this sector is a rather complicated process,” said Erik Palacios, director of the Monterrey aerospace cluster, which groups some 40 companies.
