Wood: A 25% tariff on all Mexican exports to the U.S. is an existential issue

LOS ANGELES, Calif. – Duncan Wood, president and CEO of the Pacific Council on International Policy, has penned a guest column for LatinFinance Magazine titled “LatAm Economy: In the Crossfire.”

Introducing the column, the magazine states: “With Trump returning to power, his proposed tariffs could slam Mexico. But Latin America also offers what the United States needs to match Chinese influence globally: manufacturing competitiveness and critical mineral resources. The region offers a way to reduce risk and restore balance, writes Duncan Wood, president and CEO of the Pacific Council.”

In his column, Wood points out that the “main concern” for all countries in the Americas right now is that of tariffs. He says Mexico would be impacted the most by a tariff of 25 percent.

“Mexico sends almost 80% of its exports to the United states and has benefited enormously from first the North American Free Trade Agreement and now the United States-Mexico-Canada Agreement. Mexico depends on exports of goods and services for 43.35% of its GDP.  The threat of a 25% tariff on all Mexican exports to the United States is therefore an existential issue,” Wood writes.

But, says Wood, it is also a concern for Latin America as a whole. “The region’s exports to the United States account for almost 42% of all exports,” he writes. 

For some Latin American countries, U.S. trade is not as critical. Wood points out that Argentina sent only 8.5% of its total exports to the United States in 2023, whereas China accounted for 7.7% of total exports. In the case of Brazil, the US market absorbed only 11.2% of total exports compared to 31.2% for China. 

“And this is where the incoming administration in Washington must think carefully about its strategy towards the region. Although the president-elect is primarily concerned with promoting “America First” and stemming immigration and drugs from the US southern flank, it is critically important that his government also considers the growing influence of China in the region, and the potential that Latin America offers the United States as it seeks to match Chinese influence globally,” Wood writes.

Editor’s Note: Click here to read Wood’s guest column in LatinFinance.

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