How Mexico’s leader Claudia Sheinbaum is writing the playbook for handling Trump

Mexico’s president believed Trump wouldn’t yield on tariffs, but she still negotiated a deal that world leaders are studying for their own trade talks. Albanese should study it too.

Claudia Sheinbaum negotiated a smart tariffs deal with Donald Trump. Picture: AFP.

When President Trump called her last week, President Claudia Sheinbaum was prepared to speak with a US leader who wouldn’t yield on tariffs. Instead, she negotiated a deal that world leaders are studying for their own trade talks with the US

The Feb. 3 call was tough, often tense and ran long, almost 45 minutes, according to people familiar with the matter. Sheinbaum – who alternated between an interpreter and speaking English to make an emphatic point – stayed on message, they said, parrying Trump on trade, drugs and migration in ways that caught his attention without escalating into a disagreement.

“One must speak in Trump’s language,” said a person familiar with the discussions.

The coup de grace was her administration’s idea: Mexico would deploy 10,000 troops to the border to fight fentanyl flows and help with border security, matching Trump’s own show of force along the Rio Grande. They agreed to pause tariffs for a month to see how the border enforcement went, with a similar agreement for Canada.

By the end, Trump liked her toughness, but at the same time she played ball, these people said. For example, troop deployment is something that Trump loves, one Mexican official said.

Later that day, Trump said he “had a great talk with Mexico.”

“President Sheinbaum is a woman I like very much,” Trump told reporters, before adding that whether he liked her or not, he still had to stop drugs and illegal immigration.

A National Guard officer monitors the border wall between Mexico and the US. Picture: Gerry Images.

Sheinbaum’s surprise deal with Trump showed Canadian officials that there was a path to avoiding the punitive tariffs the US had announced on Feb. 1, said a senior Canadian government official. The US, Canada and Mexico have a joint trade deal that tariffs would up-end, dealing each country economic pain but especially for America’s neighbours.

Canada at first wasn’t sure what it could put forward that would match Mexico’s offer to move 10,000 troops to the border, but then settled on creating the new position of a fentanyl czar and investing $140 million in a new unit to gather intelligence on organised crime.

Canada also said it would follow the US’s lead and label the Mexican cartels as terrorist organisations. According to the Canadian official, this step irritated the Mexicans, who felt that it supported Trump in his desire to punish the cartels in a reckless way, potentially with US military force.

In Europe, where leaders are bracing for trade talks with Trump, officials said they had studied Mexico’s and Canada’s responses and were in close contact.

Sheinbaum is now the most popular politician in Mexico, with approval ratings of 75 per cent. It is a sign of how much the country has rallied around her as Trump threatens to undo a free-trade agreement that has sent Mexico’s manufacturing sector surging in the past three decades. She, along with Canadian Prime Minister Justin Trudeau, will have another showdown with Trump on March 4, when the pause ends, but business leaders here said they had more confidence she could again find a way to work with the US president.

Her deft hand with Trump wasn’t expected. Known for her stern demeanour, the leftist politician and academic cut her teeth in university activism and is in many ways the opposite of Trump.

Mexico's President Claudia Sheinbaum speaks to reporters. Picture: AFP.

But she has built relationships with Mexican business executives who speak with Trump and advise her. And her predecessor and mentor, former President Andrés Manuel López Obrador, handled Trump similarly in 2019, when Trump called on Mexico to stem migrant flows to the US López Obrador sent some 28,000 troops to stop migrants at Mexico’s border with Guatemala, and Trump pulled his tariff threat.

Since taking office in October, Sheinbaum has surprised observers in Mexico with her flexibility on some matters of ideology, especially with the local business community and foreign investors.

“Over the years Sheinbaum acquired great pragmatism,” said Sergio Aguayo, a Mexican human-rights activist and scholar. “But Trump is also deeply pragmatic.” Tension was high before the Feb. 3 telephone call. The previous Saturday, in announcing the tariffs, the White House said Mexican drug-trafficking organisations “have an intolerable alliance with the government of Mexico.” Sheinbaum rejected the assertion as slander, and said the US was doing nothing to curb fentanyl use or combat its sale on US streets.

Like Trudeau, Sheinbaum was prepared to pull the trigger on retaliatory tariffs on US exports from Republican strongholds, according to people familiar with the plan. Unlike Trudeau, she refrained from disclosing the measures until after her call with Trump. The idea was to avoid cornering him and offer an off-ramp, these people said.

Sheinbaum and her top advisers believed Trump wasn’t bluffing about imposing tariffs on Mexico. “I was convinced that within the first minute of Tuesday, the 25 per cent tariffs on all Mexican exports would come into effect,” said Mexican Economy Minister Marcelo Ebrard.

The key was to emphasise bilateral cooperation and open the doors to talks before unilateral measures were imposed, Sheinbaum said shortly after the call. One example was the progress made in curbing illegal migration, which fell more than 80 per cent in recent months because of coordinated, bilateral enforcement efforts. The leaders agreed to schedule high-level meetings to work on migration, security and trade.

Mexico is also adopting a similar approach after Trump announced on Monday 25 per cent tariffs on imports of steel and aluminium to the US The Sheinbaum administration will seek consultations with the US government to highlight that Mexico is the world’s top market of US steel exports, buying close to $7 billion worth of US steel products last year. “That’s more than we export there,” Ebrard said on Tuesday.

The wild card in the Trump-Sheinbaum relationship is fentanyl, which is largely produced in Mexico before it is smuggled to the US, where it is a leading cause of death for young Americans. Trump made tackling fentanyl a campaign promise, and has said he would take action directly against the cartels that peddle it.

But fentanyl smugglers are mostly US citizens who bring in small quantities of the potent drug in special compartments in vehicles that elude detection among the tens of thousands of vehicles that cross the border every day.

“The control of the antlike traffic of fentanyl smugglers is almost impossible,” said Raúl Benítez, a military expert at Mexico’s National Autonomous University. Mexico would likely try to make some major captures of drug bosses and take out some fentanyl labs in order to please the US president. “Trump wants heads,” he said.

In a news conference with reporters after the telephone call with Trump, Sheinbaum said she tried to defuse Trump’s longstanding concern about the US’s large trade deficit with Mexico, which currently stands at more than $150 billion.

“I told him that it wasn’t really a deficit,” she said at a news conference. The agreement between the US, Mexico and Canada that was signed by Trump himself in 2018 has been an increasingly efficient tool to compete with China and other trading blocs, she told Trump. Mexican manufacturing exports to the US have a high percentage of American components, while Mexico is a top buyer of key US goods and commodities from auto parts to natural gas and corn.

“This was the result of being trading partners,” Sheinbaum said she told Trump. At the end of the conversation, Sheinbaum said that Trump asked her how long she wanted to put the tariffs on hold.

“Well, let’s put them on hold forever,” Sheinbaum responded. “Well, how long?” insisted Trump.

“Let’s put it on hold for a month,” Sheinbaum said. “And I’m sure that, in this month, we’ll be able to deliver results.”

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