Recent threats by Donald Trump to impose tariffs on Mexico’s vehicle sector could just be pre-election bluster or an attempt to get concessions from Mexico. But if implemented, they would deal a big blow to Mexico’s economy – a 0.6% drop in real GDP for every 10% decline in vehicle exports – and the peso would fall sharply. Most worryingly, such tariffs could be the prelude to an unravelling of USMCA.
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