thanks for staying with us we are just hours away from president Trump's decision our stock markets are down as president Trump's long threaten tariffs against Canada and Mexico president Trump is moving forward with his plan to impose 25% tariffs trade tensions between the United States and Mexico have reached a Breaking Point sending shock waves across the North American economic landscape Mexico's threat to cut off vital oil and energy flows and Key Automotive Parts could trigger a full-blown tariff war that no one saw coming once stable production chains fueled by lowcost labor in Mexico and vast
consumer markets in the United States now stand on Shaky Ground Mexican president Andres Manuel Lopez orador has made it clear that if the Trump Administration follows through on its tariff threats he has a backup plan of his own if president Trump's tariff threats continue could Mexico's Plan B upend the foundations of the United States Mexico Canada agreement framework or will both countries ultimately back down to avoid a lose lose scenario president Claudia Shin bal's recent press conference first hinted at diplomacy but warned that Mexican countermeasures were waiting in the wings meanwhile American manufacturers fear skyrocketing
costs and possible shortages if Mexico follows through on its warnings could these Mutual threats disrupt everything from automotive supply lines to oil and energy security forcing both sides to make serious concessions we will examine the risks and rivalry shaping this highstakes trade dispute and explore how close North America is to its biggest economic Showdown yet with Canada and China recently taking retaliatory steps against the United States coupled with Mexico's announcement that we are just waiting for our turn the North American Free Trade Network appears to be in for a shakeup Mexico has hinted that if
the tariffs imposed by the United States continue tariffs in Canada and Mexico for a number of reasons number one may take radical measures such as cutting oil and natural gas flows to the United States and imposing extra taxes on Parts it sends to the automotive industry thus the trade tensions that have long been labeled Trump tariffs are on the verge of escalating into a fullscale war one of Mexico's biggest Trump Cards Against the United States is its energy resources and automotive supply chains as is well known United States refineries regularly buy crude oil from Mexico
and the oil and gas pipelines along the Mexico United States border represent an important flow of energy trade between the two countries in the automotive sector American Japanese and European car makers are cross border thanks to Mexico's cheap labor and tax advantages every day hundreds of trucks transport automotive parts from Mexico to the United States or from the United States to Mexico if the Mexican Government retaliates against Trump's tariffs by saying we are starting to cut off Parts Fuel and other critical products to the United States States American manufacturers could suffer the most Mexico is
positioned as the backyard of the United States manufacturing sector and many American companies keep their production lines there thanks to cheaper labor tariffs have already sent their costs skyrocketing and the threat of energy and parts Cuts or tariffs from Mexico could further complicate matters on the morning of March 4 president Claudia Shin balm addressed the situation in her daily morning press conference she acknowledged the newly imposed tariffs but made a conscious choice not to implement immediate countermeasures against the United States this response points to a clear strategy Shin Bal understands that an immediate trade War
would increase tensions exponentially and wants to exhaust all diplomatic Avenues before taking retaliatory action Shin Bal also emphasized that Mexico has fulfilled its commitments under the agreement that led to the previous 30-day break he announced that he will personally hold a phone call with President Trump on Thursday March 6th to discuss the tariffs directly he explained that senior officials from both countries have held talks over the past month but that the formal implementation of the tariffs requires direct intervention between heads of state this call does not guarantee that the tariffs will be lifted but it
creates an important opportunity for deescalation if both leaders can set concrete measurable benchmarks they could agree on a plan that avoids further economic damage while guaranteeing cooperation on migration and fenel reduction but Shin Bal also made it clear that if the United States refuses to withdraw the tariffs Mexico will announce its countermeasures at a public meeting in El zoko on Sunday March 9 he assured the public that Mexico has a contingency plan prepared in advance and is ready to act if necessary when asked about the United States Mexico Canada agreement negotiations Shin Barm confirmed that
talks are ongoing this shows that despite the tariffs Mexico is committed to maintaining a trade relationship in fact Mexico tensions with the Trump Administration are not new there have long been verbal spats with Washington over migration policies and the border wall but trade is another dimension already Fray relations under the North American Free Trade Agreement the United States Mexico Canada agreement were further aggravated when Trump said look if Mexico does not give us favorable terms I will impose a 25% tariff Mexico called this unacceptable economic blackmail these tariffs are costing our country billions of dollars
it is true that we depend on the United States Market but the United States also depends on our lowcost production some sources said it is known that the Mexican Ministry of Commerce is considering that if Trump does not give up his stubbornness we will Blacklist American companies and impose additional taxes in particular plans to retaliate against American agricultural products and critical Parts in the assembly industry are among the leaked information in addition Mexico's energy trade with state-owned companies like PMX is an important source for United States refineries Mexico is keeping the idea that if the
flow is cut off or prices are raised through taxes the American fuel Market will suffer and inflation will be fueled from a political perspective Mexican president Lopez orador is gaining popularity at home with his message that despite Trump's big words the Mexican people will not be crushed this is because a tough stance in the trade dispute could inflame nationalist sentiments in Mexico likewise on the United States side Trump is trying to consolidate his voter base with arguments such as Mexico was already abusing us failed to protect our borders and widened our trade deficit therefore it
does not seem easy for either side to back down however economists warn this is not a win-win but a lose lose scenario Mexico's retaliation could hit Mexican workers as much as a American manufacturers automotive and electronics assembly plants could shut down because of trade barriers cutting oil and gas shipments would also reduce Mexico's export earnings still even though Mutual injury is possible Mexico continues to say we are willing to take short-term losses but we are determined to retaliate what happens next sources say Mexico is also considering the idea of joint retaliation with Canada China and
other United States Rivals China for example has announced that it will impose a 15% tariff on products from the United States starting March 10 Canada is also on the agenda with the statement that we will tax American brands like Tesla and restrict products from the United States if Mexico joins this front and a common stance is formed the Trump Administration could be squeezed from all four sides in this case the American manufacturing industry the agricultural sector technology companies and even the energy Market could suddenly experience the shock of success excessive taxes and restrictions after all
the moment Mexico says we will cut oil or sell it at a higher price on the energy side American refineries will have to look for a new formula the United States has its own Shale oil production but crude from Mexico is critical especially for refineries in and around Texas a possible Supply shortage would send fuel prices skyrocketing triggering inflation all this could increase Trump's political risks in the upcoming election atmosphere even if Trump maintains his I am protecting America with these tariffs rhetoric he will face complaints from Farmers industrialists and the middle class about Rising
costs at this point Mexican president Lopez orador could take advantage with the message that those who threaten us are hurting their own voters of course Mexico's power is not unlimited because the United States is still a huge market and most of Mexico's exports go to the United States therefore this retaliation could be seen as suicide but it could also work as a poker strategy for Trump to make concessions Mexico is playing its last trump card by saying we have a plan B ready if the tariffs go up we will retaliate can a diplomatic agreement be
reached according to experts both sides May back down thinking that there is a big loss at stake perhaps Trump will take a narrower approach to tariffs on Mexico or Grant special exemptions for Mexican Automotive Parts Mexico on the other hand will ease tensions by saying we are not cutting oil production continues in short politics and trade Wars can change the balance at any moment but the point now is that Mexico has gone all in and said if Trump carries out his threats we will use our economic weapon United States trade officials are taking the situation
seriously because Mexico is not just a market it is an integral part of the United States production chains but Trump's tone is nobody negotiates with us like that so there is a mut ual stubbornness going on after all this is typical of trade Wars there are no winners everyone loses but leaders sometimes risk this war for the sake of domestic politics Mexico will probably Force the United States to back down by putting its oil and Automotive cards on the table time will tell if Trump will back down for now we know that both countries are
waiting with their tariff guns drawn this could lead to a confrontation that could shake North American free trade in the coming period what do you think is Mexico serious or is it a bargaining tactic how will the United States respond to this retaliation let us know in the comments and do not forget to subscribe to our Channel turn on your notifications and hit the like button see you in the
