The North American Trade Bloc is both what’s old and what’s new in international trade.
The MAGA view is that the US should be economically independent — but Mexico has special status.
In this case, economics is going to overrule politics because the people benefiting are the same ones making much of the policy.
There are 2 factors to US-Mexico relations that we have to be clear on right now
That’s pretty much it. Companies like Catepillar and Toyota are going to have a strong influence on the future of US-Mexico trade relations, and unless something goes PROFOUNDLY wrong, the access that Mexican production has to US markets is going to be the best available. I’m still pretty confident that USMCA is going to survive the 2026 review, but even if it doesn’t we can assume that Mexico’s tariffs and restrictions won’t be worse than others.
The two big question marks here are China and diplomacy.
China plans on using Mexico as an outsourcing platform for exporting cheaply to the US. They know how to do it because we showed them how. The US doesn’t want this to happen, but the solution is going to be a subject of no small debate. On the one hand, it would be just great if Mexico handled this. If Mexico just started rejecting Chinese FDI in advance. That would be best — but Mexico isn’t on board. They would have to make some pretty big adjustments to their policy, and it would put them squarely at odds with China. So that leaves us with Plan B – the US uses regulations, restrictions, and tariffs to discourage Chinese exports. Unfortunately for you, that will require a lot more paperwork and bureaucracy to prove that you are not a Chinese entity.