Donald Trump’s threat of 25% tariffs on Mexico and Canada would cost the US economy as many as 400,000 jobs and increase prices for American consumers

Donald Trump’s proposed 25% tariffs on Mexico and Canada could result in the loss of up to 400,000 U.S. jobs and raise prices for American consumers, according to warnings from the Mexican government.

Impact of Tariffs

Mexican Economy Minister Marcelo Ebrard issued the caution during a press conference alongside President Claudia Sheinbaum on Wednesday. Drawing from his experience in contentious trade negotiations during Trump’s first term, Ebrard presented an analysis of how these tariffs would strain the Mexico-U.S. trade relationship.

Ebrard highlighted the potential effects on the U.S. automotive industry, particularly companies like General Motors Co. and Ford Motor Co., which manufacture 88% of the pickup trucks sold in the U.S. “Our estimate is that the average price of these vehicles will increase by $3,000 per unit,” he stated.

Mexico's Countermeasures

Mexico is ramping up its response to Trump’s tariff threats. The government is mobilizing national business leaders and announced plans to strengthen trade agreements with the European Union and deepen commercial ties with Brazil. These steps were outlined at Sheinbaum’s daily press briefing.

Trump has vowed to impose tariffs on imports from Canada and Mexico unless both nations take action to stop the flow of fentanyl and undocumented migrants into the U.S. Later on Wednesday, Sheinbaum reported a conversation with Trump addressing these issues.

“We discussed strengthening security cooperation within the framework of our sovereignty and Mexico’s campaign to prevent fentanyl consumption,” Sheinbaum wrote in a post on X.

Mexico’s Warning

Sheinbaum had earlier hinted at potential retaliatory tariffs, cautioning that such a trade conflict could have severe economic repercussions. “One tariff will be followed by another in response, and this cycle could jeopardize shared companies,” she remarked during her first public response to Trump’s threats.