Description: In light of Trump’s inauguration as the President of the United States, the European Union and Mexico have bolstered trade cooperation. The announcement comes as Trump’s administration has publicly announced its intentions to introduce additional tariffs within the regional trade agreement between the US, Canada and Mexico known as the USMCA. In his previous term as President, Trump initially imposed the tariffs in the US steel and aluminum industry trade with Mexico, but since the upticks have been short lived, he ended the initially imposed tariffs on steel and aluminum towards Mexico and Canada.
Impact: Mexico as part of the USMCA is threatened by the announced foreign economic policies announced by the Trump administration. In that respect, the country would look to diversify their foreign trade and exports portfolio to conform towards stable economic alliances such as the one with the EU. The US is risking on destabilizing an already fortified economic alliance with Canada and Mexico which could further stem unstable economic foreign policy for the Trump administration in a period of time when the markets are dealing with the fluid geopolitical state globally and still recovering from the impact of the Ukraine – Russia war.