By Kylie Madry
MEXICO CITY (Reuters) – Mexico’s top economy officials on Tuesday downplayed concerns about trade talks with Donald Trump’s administration, saying the potential impact on American companies could give the incoming U.S. president second thoughts about levying massive tariffs.
Trump campaigned on a pledge to roll out a slew of tariffs, including for firms that had moved operations to Mexico, in a bid to restore jobs in the U.S.
Economists have warned that such tariffs would amount to a serious blow to Mexico’s export-dependent economy and have warned of a lesser hit to the U.S. economy.
“Mexico’s negotiation power is relevant,” Mexico’s economy minister, Marcelo Ebrard, said at a press conference on Tuesday, pointing to the number of multinational firms that have set up shop in his country.
“Any action that you take to put at risk (the U.S.-Mexico trade relationship) means thousands of companies” will be impacted, Ebrard said. “There’s hardly an important U.S. company that doesn’t have money here.”
Ebrard suggested last week that Mexico could roll out retaliatory measures of its own.
He said on Tuesday that his team has been preparing to meet Trump officials ahead of Trump’s January inauguration.
A review of the trade agreement between the two countries and Canada is also set for 2026. Trump led an overhaul of the agreement in his first term.
Ebrard and other officials also downplayed U.S. concerns that China was using Mexico as a back door to avoid trade barriers.
Ebrard claimed that just 0.4% of Chinese investment coming into North America goes to Mexico, with over two-thirds going to the U.S.
Mexico’s ability to bring in record amounts of foreign direct investment in recent years – part of a trend known as nearshoring, in which multinationals move operations closer to their final destination – is a top strength, the officials said.
Deputy Economy Minister Luis Rosendo Gutierrez said the vast majority of investors he recently met with in New York still wanted to invest in Mexico, even with concerns over recent constitutional reforms.
Ebrard also said that top carmakers such as Ford (NYSE:F) had no plans to move production from Mexico.
Trump had floated both a 200% tariff on all autos imported from Mexico and a 200% tariff on China-related automakers that move production to Mexico.
As for billionaire Elon Musk’s Tesla (NASDAQ:TSLA), Ebrard said, Mexico is still waiting to hear back on whether it will proceed with a previously announced multi-billion-dollar megafactory in northern Mexico.
Trump has tapped Musk, who was a major supporter of his presidential campaign, as the co-head of a new department aimed at improving government efficiency.