In Puebla, Mexico, a city with an auto industry, there is a mixture of calm and some tension. Life goes on as usual, but on the day the new tariffs were announced, many were watching the news from the United States on their mobile phones.
Concern, but also confidence
When they appeared, the relief was great: the fears were for tougher measures from the White House – for Puebla and for Mexico, which fought hard and earned its status as a reliable center for car production.
However, people on the street are divided: “There is no reason to be afraid of Trump's tariffs“, says economics student Fabricio Fernandez from Puebla in an interview with DW: “Because everything is very simple, he pays the tariffs himself“.
Pensioner Julia, who fears for the future of the automotive industry in Puebla, is much more concerned: “All this is very worrying for the people, for the country, for everything. When I go to the supermarket, everything is more expensive, and if jobs are lost, it will be even worse," she says.
Supplier boom
"During Trump's first term, the North American Free Trade Agreement between Canada, the United States and Mexico was renegotiated. The result was that the automotive industry benefited the most," says Thomas Karig, former vice president of Volkswagen-Puebla. One of the German carmaker's largest plants outside Germany is located there, producing mainly for the US market. In Mexico, this has led to a supplier boom. "Demand for auto parts has also increased in the US, and we can definitely say that the renegotiation was a successful step for both the US and Mexico," Carrig said in an interview with DW.
After the initial shock over the news from the US had subsided, Mexican Economy Minister Marcelo Ebrard expressed his confidence in an interview with Radio Formula. According to him, the current trade reorganization even represents a great opportunity for Mexico. "What we have seen is the birth of a new commercial and probably geopolitical order. One phase has ended and another has begun," Ebrard said.
The Economy Minister even believes that Mexico has an advantage thanks to the existing trade agreement: "The agreement remains in force and this is extremely valuable for Mexico," Ebrard said. "We do not have reciprocal tariffs. A large part of our foreign trade, which is carried out through T-MEC (the Free Trade Agreement between the United States, Mexico and Canada), is duty-free, which is very good news.“
Mexico reacts calmly
It is possible that after the first attempt at renegotiating the Free Trade Agreement, Mexico and the United States will face a second round of negotiations. Such are the expectations of management consultant Kenneth Smith, who participated in the renegotiation: "We know that the United States wants to reopen the Agreement and renegotiate it", he says.
„Of course, Mexico can protect itself with counter-tariffs on products from the United States. But the question is how reasonable and expedient this is," Carig points out in turn. “Ultimately, tariffs are a tax and this tax is paid either by consumers or by businesses. "All this would only be to the detriment of the Mexican population," the expert is categorical.
The consequences are different
Initial reactions to the US tariff policy were mixed. Mexican media outlet Milenio reported that car manufacturer Stellantis had decided to stop production at two Mexican plants - Saltillo Van and Toluca. The news came shortly after Trump announced his new, higher tariffs.
According to a Mexican news portal, Nissan is also temporarily halting work at two plants where it produces commercial vehicles. But there is good news from Sweden: Volvo wants to increase its investment in the plant in Cienaga de Flores in the state of Nuevo León to 700 million US dollars, announced Economy Minister Ebrard.
Author: Tobias Koeffer