Mexico’s tariff walls are designed to suit America’s trade policy but Uncle Sam’s command has its limits

When Mexican President Claudia Sheinbaum unveiled her plan to raise barriers in September, a shield for local industry was the stated aim, but her real anxiety was clearly a review of the US-Mexico-Canada Agreement (USMCA) due in 2026.

Recall how US President Donald Trump rattled Mexico and Canada with threats within days of taking office. In April, his ‘reciprocal tariffs’ spared them both; today, they face an effective rate of under 10%, thanks mostly to how deeply integrated that trade bloc is. With US-bound exports making up 80% of Mexico’s total, worth a third of its GDP, its vulnerability was obvious.

Sheinbaum had no option but to respond to Trump’s grouse over Chinese exporters using Mexico as a launch-pad for the US market. Before Trump could tighten the USMCA’s ‘rules of origin’ or slam US gates shut, she had to act against Asian supply chains seen as running rings around his goal of reviving American factories behind tariff walls.

Whether he can bend Canada to his will is far less clear, but America’s latest National Security Strategy suggests that the US views North America as its fortress all the way to the North Pole.

As an economy moulded by US demand, Mexico is plainly a special case. Trump’s jigsaw of geopolitics, however, has other major pieces that dare not defy his contours of how they fit in.

Across the Atlantic, Europe’s fear of Russia has played a role in the EU’s acceptance of a lopsided trade deal with America, a price paid for Uncle Sam’s security. Further east, a swathe of countries has lined up behind America’s snappy plan for “eternal peace” in West Asia.

As for the Indo-Pacific, Japan’s recent deal with the US tilts trade and investment flows the latter’s way, à la Europe.

Similar patterns are visible in US dealmaking with Vietnam, Malaysia and Thailand; for US favour and tariff relief, they must grant America not just uneven market access, but also the authority to reset rules in ways that place US interests above their own sovereignty.

China, of course, has held its own in this fraught scenario. But how far will the US imperium go?

In India, we face a test of strategic autonomy only to the extent a US-loaded deal could yield us economic benefits that outweigh this solemn national pledge, the odds of which look dismal.

A trade pact with America should represent a clean bet on mutual gains, that’s all. Yet, the emergence of India’s economy must rely on an export thrust in trying times.

To cover all bases, we must look east and aim to compete globally, instead of merely seeking ‘complementary’ markets. For success free of trade winds that may shift on foreign whimsy or assertions of power, we need to sell stuff that’s either cost competitive or unique in markets that value it.

Since we must count on our very own market for offtake that assures us economies of scale, domestic demand must not threaten to plateau once middle-class consumption reaches saturation. Internally, therefore, we should invest heavily in affordable healthcare and education to steadily expand the base of Indian buyers as we go along.

As we move to close gaps in infrastructure, catch up on logistics, ease regulatory friction and rethink import policy, let’s also guard against weak upward mobility letting us down. A self-deal to that effect is all it takes.