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Weekend Reads
Mexican President Claudia Sheinbaum, the successor of influential former President Andrés Manuel López Obrador, has made progress on President Donald Trump’s priority of cracking down on fentanyl smuggling. But the recent tariff announcement poses new challenges.
At Hudson, Daniel Batlle hosted a panel of experts to analyze what these developments mean for Mexico, the United States, and cooperation between the two countries.
Watch the event, listen to the podcast, or read the transcript.
Also, tune in this Monday, April 7, at 2:00 p.m. as Hudson hosts Chairman of the Council of Economic Advisers Stephen Miran for remarks and a fireside chat.
Key Insights
1. Facing an uncertain policy environment, companies may hesitate to respond to the tariffs.
“I believe that a large number of firms will try to stick with their current supply chains, maybe make some modest moves to the US, more for political reasons than from an economic rationale. But just imagine that you move some auto plants from Silao, Guanajuato, to South Carolina because of the current rules on autos that, by the way, are in flux. And then those rules change in the next administration. Then what could have looked like a smart move today will be a very costly move later on. So I think a lot of companies will be very cautious. Maybe they will be making some modest moves, but I think it is not technically and not financially feasible to engage in wholesale change, yes, because of some higher costs in the US, but also because of policy volatility in general.”
— Antonio Ortiz-Mena, Founder and CEO, AOM Trade and Investment Advisors
2. President Trump’s economic pressure has produced results for cooperation on ending the fentanyl crisis.
“The Trump administration certainly conveyed the seriousness with which we are taking the fentanyl issue with the foreign terrorist organization designation of Mexican cartels, with the imposition of tariffs to underscore to the Mexicans that we want to see greater action at this point. And with some of this talk about possible unilateral military action, I think that that has succeeded in moving the Overton window for possible US-Mexico cooperation. The clearest example of that was the Mexican expulsion of 29 long sought-after narcotraffickers to the United States on March 1. . . . It was quite courageous on [President Sheinbaum’s] part, and probably would not have happened without some of the pressure from the Trump administration.”
— John Creamer, Former Deputy Chief of Mission, US Embassy in Mexico
3. Sheinbaum has signaled alignment with US economic priorities. But she needs to take more concrete steps to attract more US investment.
“[Sheinbaum has] made a dramatic and very significant conceptual shift. She’s mentioning two words that were taboo during Lopez Obrador’s time, and one is economic growth, the other is near-shoring. And when she talks about economic growth, she talks about private investment. The rhetoric is excellent. What there’s very little of is substance behind it. And the reforms that have been introduced, which she continues to support, go counter to the possibility of attracting investment.”
— Luis Rubio, Chairman, México Evalúa
Quotes may be edited for clarity and length.
Go Deeper
On Monday, Stephen Miran, chairman of President Donald Trump’s Council of Economic Advisers, will provide remarks at Hudson Institute and join Senior Fellow Thomas Duesterberg for a fireside chat.
Thomas Duesterberg, William Chou, and Mario Mancuso discussed the Trump administration’s America First Investment Policy through the lens of strategic competition between the US and China, alliance politics, and broader political economy considerations.
In Aspenia Online, Thomas Duesterberg evaluates the relative economic strengths between the United States and China, examining how US trade policies and alliances shape the Trump administration’s efforts to counter Chinese mercantilism and Beijing’s attempt to create an alternative global system.
