For Mexico, Trump’s focus on fentanyl brings new tariff blow

Early on, Mexico’s President Claudia Sheinbaum gained wide recognition at home and abroad for her deft handling of Donald Trump. So far, she has little to show for it.

Mexico's President Claudia Sheinbaum and US President Donald Trump. The Mexican leader is a reserved and stern US-­educated energy engineer who has faced down Trump’s repeated accusations that Mexico is a narco state. Pictures: AFP

Early on, Mexico’s President Claudia Sheinbaum gained wide recognition at home and abroad for her deft handling of Donald Trump. The leftist avoided confrontation during phone conversations and addressed US demands that her government do more to fight Mexico’s powerful drug cartels.

So far, she has little to show for it. Her government has been unable to defuse the threat of stinging US tariffs, in large part because of the White House focus on whether Mexico can take on the entrenched cartels feeding fentanyl and other illicit drugs to the voracious American market.

The Trump administration recently elevated the dismantling of Mexico’s cartels to the top of its ­security agenda, labelling them as terrorist organisations.

Mexican officials say the constant threat that an impatient US might take unilateral military action, such as using drones to bomb fentanyl labs or sending special forces to capture Mexican kingpins, keeps them up at night.

The US President on Saturday said he would impose a 30 per cent tariff on Mexican goods on Aug­ust 1 if Mexico didn’t step up its ­efforts to fight drug gangs.

He also said the US would charge a 30 per cent tariff on the EU, also effective from August 1.

Despite Sheinbaum’s help to secure the border, “Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground,” Trump said in a ­letter addressed to Sheinbaum and which he posted on Truth ­Social on Saturday morning.

Donald Trump and first lady Melania Trump arrive at Lackland Air Force Base to survey damage and meet with first responders and victims of last week's flash flooding in San Antonio, Texas. Picture: Getty Images via AFP

A reserved and stern US-­educated energy engineer and former university activist, Sheinbaum has faced down Trump’s repeated accusations that Mexico is a narco state. “It’s important to keep a cool head,” she said responding to Trump’s tariff threat during a speech on Saturday.

Since he returned to office, Trump has delivered a stream of comments against her government, from the smuggling of fentanyl to illegal migration, and imposed sweeping sanctions against Mexican banks as well as immigration raids. He and senior members of his administration have often been combative in their conversations with Sheinbaum and her ministers.

Mexico has worked hard to accommodate US demands. Sheinbaum deployed 10,000 troops to the border to stop migrants from entering the US. She boosted law enforcement efforts, dismantling hundreds of drug labs, and expelled 29 imprisoned drug bosses to the US. Fentanyl seizures in the US plummeted, in part due to Mexico’s tougher stance.

Mexico has tried to maintain open communication channels with the US, and Economy Minister Marcelo Ebrard, who heads trade negoti­ations, regularly commutes between Mexico City and Washington. “This government feels it speaks with Trump and his cabinet members, and thinks it’s advancing in the relationship, but then the US does something that takes you back to square one,” said Antonio Ocaranza, a Mexican political analyst.

The new tariff threat comes amid rising frustration and fatigue with the Trump administration.

Ebrard said he learned about Trump’s letter during meetings with senior Trump administration officials on Friday as they discussed security, immigration, border and water management issues. The bilateral discussions were difficult, said another source.

“We said at the meeting this was unfair treatment and we dis­agreed,” Ebrard wrote on X on Saturday. Trying to put the best face on the talks, he said the two governments would work to find alternatives to protect companies and jobs on both sides of the border before the August 1 deadline. “In other words, Mexico has begun negotiations,” he added.

Mexico is the US’s largest trading partner, with $US840bn in bilateral trade in 2024.

The new levies would replace the 25 per cent tariffs on Mexican goods that don’t comply with the US-Mexico-Canada Agreement.

Some 90 per cent of Mexican exports to the US comply with USMCA requirements, Mexican officials say, and it is unclear whether these goods would still be exempt from the tariffs after Aug­ust 1, as the White House has said would be the case with Canada.

Officials in Canada are finding the limits of what a friendly approach to Trump gets. Canadian officials said trade talks with the US were progressing, but Trump threatened a tariff hike last week

The Wall Street Journal