Confusion on Tariff Déjà Vu
Just when it seemed that Mexico would be spared new tariff drama, President Trump announced on Saturday a 30% import tariff on ‘’Mexican exports’’ (alongside similar tariffs on EU goods). The new measures would come into effect on August 1, unless a deal is reached beforehand.
Despite the alarming 30% import tariff headlines, it seems probable that the impact will in fact be far less, even if confirmed. The American press (Bloomberg, NY Times, Politico, etc.) has quoted senior Trump officials saying that this 30% duty will only apply to Mexican exports that are not compliant with USMCA (i.e., about 13% of the total Mexican exports to the U.S.). If so, the 30% would simply replace the previously set 25% “emergency tariff” on Mexico’s non-USMCA compliant goods. In short, a five percentage point tariff increase on about 13% of exports, leading to a non-material effective average tariff rise of under 1%.
Still, Trump himself has yet to confirm this, and some uncertainty still lingers. Even the well-sourced Wall Street Journal concluded that the final outcome remains unclear. And Mexico is still subject to sector specific tariffs (steel tariffs, now tomatoes facing 21% anti dumping duties, and perhaps pharmaceuticals going forward.) And uncertainty does not encourage investment.
The 30% tariff threat was delivered via an open letter to President Sheinbaum. Trump made a clear, if difficult to measure, demand: stop the fentanyl, or pay the price. “The cartels are trying to turn all of North America into a narco-playground,” he wrote, once again accusing Mexico of letting traffickers roam unchecked. Mr. Trump issued an explicit warning: should Mexico respond with tariffs of its own, the U.S. would escalate further. “Whatever number you pick,” he wrote, “we’ll add it to the 30%.”
President Sheinbaum first commented on the letter from Sonora, offering her usual carefully composed response, emphasizing ongoing cooperation while reaffirming Mexico’s position on sovereignty. By the following morning, she underscored that both governments are in communication and that the bilateral relationship remains too important to jeopardize over political theatrics.
For now, Mexico’s strategy hinges on negotiating a comprehensive bilateral agreement that covers all the key concerns: fentanyl trafficking, migration control, and trade. On security, Secretary Omar García Harfuch has begun showing concrete results: after 29 high-profile cartel figures were extradited weeks ago, recent targeted operations have further disrupted organized crime’s activities. Still, Washington insists it’s not enough, as illustrated by its unilateral move to accuse three Mexican financial institutions of aiding money laundering. Just what would satisfy their demands remains to be seen.
The Deal, the Drama, and the Denial
When Ovidio Guzmán —son and heir of El Chapo— pleaded guilty in a Chicago courtroom last week, he didn’t just admit to drug trafficking, he also promised to cooperate with U.S. authorities. Notably, cooperation in the U.S. legal system doesn’t require audio recordings, wire transfers, or notarized confessions. As Genaro García Luna can attest, sometimes all it takes is raising your hand to deliver a few stories compelling enough for just 12 jurors. That precedent now hangs over Mexico like a cloud.
President Sheinbaum, coincidentally (or not) touring Sinaloa at the time, was asked about Ovidio’s plea deal. Her response: any accusation must be supported by hard evidence and processed through Mexico’s Attorney General. A nod to due process, and a significant departure from the official stance when it was Mr. García Luna on the stand – but also a reminder that Mexico isn’t in the driver’s seat for perhaps the most consequential prosecution in a generation.
The U.S., for its part, isn’t waiting around. Neither is the Guzmáns’ lawyer. Jeffrey Lichtman called Sheinbaum’s expectations “absurd,” mocked the failed prosecution of former Defense Secretary Salvador Cienfuegos, and accused her administration of behaving “more like the PR arm of a cartel than a functioning democracy”. It was a provocation in full daylight, and President Sheinbaum fell for it. Her response: a defamation lawsuit, filed in Mexico, against a U.S. defense attorney, for statements made on U.S. soil. Lichtman, unsurprisingly, doubled down. “Hold as many emergency pressers as you like,” he tweeted, “but the people of Mexico (and I) know what’s really going on.” The tweet went viral.
The context matters: Ovidio’s sentencing was postponed. He is cooperating. And if the DOJ’s strategy mirrors the García Luna case, this is only the beginning. Joaquín Guzmán López, another son of El Chapo, could be next.
From Flies to Fries: When Bugs and Tomatoes Break Supply Chains
In a sharp, unexpected reversal, the U.S. closed Arizona border crossings to Mexican cattle just two days after reopening them, triggered by a single screwworm case detected over 2,300 kilometers away in Veracruz. President Sheinbaum criticized the decision as “completely exaggerated,” arguing that the outbreak was isolated and should not justify penalizing northern states.
U.S. officials disagreed. The USDA demanded tougher containment, citing weak internal surveillance. As a result, Mexico’s cattle exports have plummeted—down 64% in volume and 53% in value through May 2025—amounting to $400 million in losses. The crisis is worsened by the shutdown of a sterile fly production facility in Chiapas, closed under AMLO’s budget cuts and still offline under Sheinbaum. For now, Mexico relies on slower fly imports from Panama.
Meanwhile, tomato producers face a parallel blow. On July 14, the U.S. formally ended the 2019 Suspension Agreement on Mexican tomato exports, reinstating a 20.91% antidumping duty. Commerce officials claimed Mexican growers were undercutting U.S. prices, violating fair trade norms. While the official tariff is 20.91%, most exporters will face a 17.09% rate, due to company-specific margins.
This collapse affects a $2.8 billion annual trade, hurting growers in key states like Sinaloa and Baja California. Sheinbaum maintains that Mexico is responding as any developed country would, but the tone from the U.S. is increasingly rigid, as explained above.
The National Agricultural Council (CNA) has voiced strong concern over the U.S. decision. In their opinion, the measure threatens not only the economic stability of key agricultural regions in Mexico but also the broader food security of both countries. The Council warns that disrupting such a deeply integrated supply chain could lead to higher consumer prices in the U.S., reduced competitiveness for growers on both sides of the border, and further strain an already delicate trade relationship.
The Exile Ends: Peña Nieto Speaks, Only to Find Legal Trouble
Following the publication of an investigative report by Israeli outlet The Marker, linking former President Enrique Peña Nieto to a $25 million spyware deal involving the Pegasus surveillance software, Mexico’s Attorney General Alejandro Gertz Manero announced the opening of a criminal investigation. According to the report, Peña Nieto allegedly facilitated the purchase of Pegasus through shell companies tied to Israeli businessmen in the final months of his presidency.
Contact:
Gilberto García
Partner and Head of Intelligence
gilberto.garcia@miranda-partners.com
Laura Camacho
Executive Director Miranda Public Affairs
laura.camacho@miranda-partners.com
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