Mexico cannot afford a trade war with the U.S., according to a StoneX economist

Economists are weighing in on Mexico’s approach to U.S. tariffs.

Arlan Suderman with StoneX tells us that there is a reason Mexico has been so receptive to President Trump’s demands:

""I’ve been impressed with President Sheinbaum’s approach to President Trump. I felt like they would be able to work something out, and I felt like Trump set the tariff at 25%— Mexico really couldn’t afford, nor could they afford counter tariffs on our food-based commodities because of the food inflation that would create.”

Suderman says that Canada is a different story. Their political scene has been messy lately, leading to a delay in response.

“I think it’s going to take longer. I think they’re less organized right now and responding to it, and I think that’s going to take a little bit longer. Not as long as China, by any means. So I do think that we’ll move to an agreement at some point, maybe over the coming weeks, but it’s going to take longer than Mexico.”

The latest tariff delay only includes products covered under the USMCA. Potash imports from Canada were also adjusted down to 10%, which was welcomed news with planting season already underway in parts of the U.S.

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