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Mexican President Claudia Sheinbaum announced that Mexico will respond to US tariffs following April 2. She stated that free trade agreements should not include tariffs and expressed openness to discussions with the US.
Economy Minister Ebrard confirmed ongoing negotiations with the US Commerce Secretary to safeguard autoparts manufactured in Mexico. It remains unclear how assertively Mexico will react to the tariffs, as this approach has been consistent throughout Mexico’s strategy.
Trade tensions and measured diplomacy
The statements made by Sheinbaum and Ebrard underline a growing tension between long-established trade principles and political manoeuvres from Washington. Mexico’s choice of words—emphasising fairness and willingness to engage—signals that any countermeasures will likely be calculated rather than reactive. Sheinbaum’s remarks, pointing to the incompatibility of tariffs within the framework of existing free trade agreements, suggest that Mexico intends to appeal to both legal and diplomatic channels rather than standing down or escalating quickly.
Ebrard’s involvement adds a technical layer to this. His focus on autoparts manufacturing highlights one of the most integrated sectors between the two economies. Talks with the US Commerce Secretary are being kept alive to preserve this flow, although the contours of any agreement remain unknown. That’s allowed some room for manoeuvre, meaning timing and signalling will be carefully managed in the short term.
Now, looking ahead, any swift shifts in trade policy between the US and Mexico—particularly if retaliatory measures are introduced—may bring immediate changes to market expectations in industrial-linked futures and peso-based hedging instruments. And rightly so. We’ve often seen that even modest policy shifts between these neighbours can trigger momentary pricing inefficiencies or spread dislocations.
Traders should prepare for measured, not sweeping, action from the south. Mexico’s tone remains consistent with a rules-based approach, and while potential retaliatory tariffs could be on the table, nothing so far points to moves that would spook broader markets. Rather than react to headlines, the immediate priority should be on watching very specific cross-border sectors—autoparts, agri-exports, and freight logistics routes—for signs of friction.
Market implications and strategic timing
If talks fail to produce technical adjustments or extensions, then we would expect option volatility to reflect a higher risk premium on affected sectors. These developments are highly localised, however, and existing long gamma positions tied to peso-linked exposures or North American equity indices could still find protective value from this kind of staggered negotiation newsflow.
It’s always instructive to observe where conversations are being held—direct communications between Ebrard’s office and the US counterpart mean we’re not yet in the territory of WTO complaints or global arbitration. Until—or unless—things recalibrate in that direction, moves by either side are most likely to target discrete economic categories, with a preference for reciprocity rather than escalation. Traders might be better served by positioning around fixed response windows rather than speculating on sweeping new frameworks.
Price pressure in near-dated derivatives markets, if seen, will likely be short-lived unless structural tariff policies are announced, which at this point appear unlikely. In any event, the guidance coming from Mexico remains clear: no abandonment of existing deals, but a readiness to respond proportionately. That gives us a defined baseline, which in times of potential uncertainty, is rare enough to value.
