Apr 02 (V7N)- Mexico’s downgraded economic growth forecast highlights the vulnerability of its economy to U.S. trade policies, especially under President Donald Trump’s tariff-heavy approach. With over 80% of Mexican exports headed to the U.S., any disruption in trade can have significant consequences.

The proposed tariffs, particularly on automobiles, could severely impact Mexico’s auto manufacturing sector, which is a key driver of its economy. Global automakers like Ford, General Motors, BMW, Volkswagen, and Toyota rely on Mexican plants for vehicle assembly, and new tariffs could lead to higher production costs, reduced exports, and potential job losses.

While President Claudia Sheinbaum has ruled out an “eye for an eye” approach, Mexico may still explore alternative strategies, such as seeking trade alliances with other nations or negotiating exemptions. Meanwhile, the uncertainty surrounding Trump’s trade policies is causing concern among investors and businesses, as reflected in Mexico’s central bank slashing its growth projection to just 0.6%.

If these tariffs take effect, they could not only strain U.S.-Mexico trade relations but also reshape supply chains and investment patterns in North America.

END/BUS/RH/