Mexico's Sheinbaum offers insights on handling Trump: A CEO's viewpoint
Mexico's President Claudia Sheinbaum, the first female and Jewish leader of the country, has been steering the nation through challenging times. Inheriting a nearly zero-growth economy, increasing debt loads, high inflation, and a strong currency, Sheinbaum has had to make important funding decisions on her predecessors' expensive pet projects.
Despite the odds, Mexico has managed to largely avoid the heaviest tariffs imposed by the Trump administration. This relative tariff protection can be attributed to several factors.
Firstly, the preferential treatment afforded to Mexico under the United States-Mexico-Canada Agreement (USMCA) has been a significant advantage. This trade pact fosters mutual respect and cooperation between U.S. and Mexican officials, helping Mexico avoid additional or escalating tariffs that have affected other nations.
Secondly, Sheinbaum's calm, professional engagement and her administration’s efforts to maintain dialogue and cooperation have helped Mexico deflect harsher tariff measures during a period of elevated trade tensions.
Thirdly, ongoing high-level talks between Mexico and the U.S., including multiple calls between the presidents, have delayed harsher measures. This dialogue approach, alongside commitments from Mexico to reduce trade barriers, has played a key role in maintaining the tariff status quo for Mexican exports.
Lastly, Mexico is working to reduce its economic dependence on imports vulnerable to U.S. tariffs by increasing domestic production in key areas like corn, beans, rice, and fuel products.
Sheinbaum's domestic policy decisions are not agreed upon by everyone, but she has earned respect as Mexico's leader. Her administration has demonstrated progress in stopping the flow of drugs and addressing cartel violence, which has won Trump's respect.
However, the U.S. government has accused Sheinbaum's administration of having an intolerable alliance with cartels, being afraid of the cartels, and being unwilling to do anything significant against them.
Sheinbaum's team has taken steps to curb the flow of Chinese investments and goods into the country, raising tax rates on small-value packages from Shein and Temu, not encouraging investment of Chinese auto suppliers given the sensitivity of the U.S. administration, and cracking down on Chinese counterfeit goods.
The U.S. has taken measures such as a 1% tax on all cash remittances leaving the U.S., a move that disproportionately affects Mexican families. ICE officials have also rounded up Mexican citizens in the U.S. and sent them to detention centers, with some being sent to a U.S. military base in Djibouti or the Alligator Alcatraz detention center in Florida.
Despite these challenges, Sheinbaum has successfully steered Mexico through turbulent waters. Her administration has responded to threats and criticisms from the Trump administration with facts and data in the daily press briefings. She will need to continue demonstrating her administration's commitment and showing progress to avoid future tariffs.
Sheinbaum and her team have been having phone calls nearly once a month directly with Trump, and Economy Minister Marcelo Ebrard has been in Washington every few weeks since Trump was elected to meet with U.S. trade and commerce officials. Sheinbaum has emphasized the steps her government has taken to reduce fentanyl trafficking to the U.S., help stem the flow of immigrants at the border, and crack down on cartel activity. Her administration has deployed 10,000 troops to the border, sent 29 cartel leaders to the U.S. for trial, and dismantled or destroyed more than 1,000 drug labs.
As of now, Sheinbaum's most recent approval rating stands at 80%. Travis Bembenek, CEO of Mexico News Daily, who has been living, working, or playing in Mexico for nearly 30 years, attests to the resilience and determination of the Mexican people under Sheinbaum's leadership.
- Mexico's President Claudia Sheinbaum, amidst a stagnant economy, rising debt, high inflation, and a strong currency, has been navigating through challenging times, making crucial funding decisions on her predecessors' costly projects.
- The U.S.-Mexico-Canada Agreement (USMCA) has served as a significant advantage for Mexico, providing preferential treatment and fostering mutual respect between U.S. and Mexican officials, thereby helping Mexico avoid severe tariffs.
- Sheinbaum's approach of maintaining dialogue and cooperation with the U.S. during heightened trade tensions has also been instrumental in deflecting harsher tariff measures.
- To minimize economic dependence on U.S. tariff-vulnerable imports, Mexico is boosting domestic production in key sectors like corn, beans, rice, and fuel products.
- The U.S. government's accusations towards Sheinbaum's administration of having an intolerable alliance with cartels and being unwilling to address them have sparked controversy, despite progress made in reducing drug trafficking and cartel violence.
