On November 5, the elections will be held in the United States: on one side the Democrat Kamala Harris and on the other the Republican and former president Donald Trump. In the context of a trade war with China and the review of the T-MEC How will Mexico be affected? What are the tools that the country has to face it and what is the outlook in the face of each victory?
Mexico has just gone through the electoral process and we know that the next six-year term will be led by Claudia Sheinbaum Pardo and what will be, broadly speaking, the economic and foreign trade policies that will be promoted.
However, given the change of presidency in the United States, Now more than ever it is essential to analyze the bilateral relationship in the current context.
In a scenario in which polarization is at its peak, it is important to mention that trade issues are no longer so separate from politics. During the 3rd Binational Convention of the American Society of Mexico, the former ambassador of Mexico to the United States, Gerónimo Gutiérrez, explains that the relationship between both countries has changed in recent decades due to different factors.
“Due to conflicts and disputes in the commercial sphere, due to the contamination of the political, commercial and economic agenda, the unspoken rule that had existed in the relationship that commercial matters moved separately was broken. We have entered a situation – which I believe is a trajectory – and we went from being strategic partners to uncomfortable partners for each other.“,
stated the managing partner at BEEL Infrastructure Partners
Given the upcoming review of the USMCA, the arrival of a Donald Trump or Kamala Harris, foreign policies in both countries, etc. is It is essential to have an overview of the possible implications.
United States and political polarization
“It seems to me that we are facing very important processes, that we have to be very careful in what each candidate says, listen to them carefully and create a plan.“says Dr. Estefanía Cruz Lera, Researcher at the North American Research Center.
The expert points out that there is a misunderstanding that Mexico does better with Democratic administrations. He states that The point is that Democrats often avoid contentious issues on the bilateral agenda and that brings inertia with it, which is then pushed by Republican administrations, be it borders, drug trafficking, security, etc.
That is why the researcher considers that Mexico It does not have a clear strategy regarding the short-term bilateral relationship nor the implications that will be put on the table.
In this same sense, Dr. Rafael Fernández de Castro, Director of the Center for Mexico-United States Studies at the University of California San Diego, detects certain factors that must be taken into account:
- The great political polarization that did not previously show the same levels
- That the United States has an “outdated” electoral system, a factor that benefits the Republican Party with respect to rural populations
- The blow of inflation for voters
- An eventual “hidden vote” for Donald Trump
- The issue of migration and the Republican narrative that Biden “has not been able to defend the border” from migrants
- That the election occurs in one of the most critical moments at the international level
The expert recalls that several important wars are currently active for the entire panorama that must be taken into account: in Ukraine, in the Middle East, in Gaza specifically, as well as in Sudan.
In this sense, The expert points out that the United States is gradually leaving its strength as the most important country in the world to recognize the emergence of other blocks led by China and other allied countries.
“For many years in foreign policy he spoke with one voice. When Republicans and Democrats went abroad, they spoke with one voice. That was broken. It burst in half. It gives the United States a lot of weakness. And there I see things really very difficult“he points out.
And at this point another concept appears in the discussion: technopolarization. It refers to the scenario in which technology companies become as powerful as the States themselves and have much more participation than we can imagine in geopolitical events.
The trade war against China
Although for some experts there is no imminent risk of war between China and the United States, They do recognize the concept of trade war that will advance in the coming years and it will intensify depending on the person who wins the elections: Kamala Harris or Donald Trump.
While trade between the United States and China grew exponentially in the years after China joined the World Trade Organization in 2001, concerns about the trade implications slowly emerged.
The Council of Foreign Relations think tank highlights that Beijing continues to opt for state-led development, granting subsidies to specific sectors over American and foreign companies. This is in addition to national security concerns about the investment of Chinese companies, especially in relation to technology theft and espionage.
Although specific actions had been taken for several administrations in the United States to stop the exchange, it was under former President Donald Trump where stronger tariffs and restrictions appeared.
All of this continued and escalated during Joe Biden’s administration, with Trump’s promises to further intensify the trade war.
“There are many critics within the United States of how it is carrying out its economic process and that obviously worries us as Mexicans. We are going to worry about something that Donald Trump has proposed about increasing tariffs or encouraging the trade war with China. The problem is that Mexico is now triangulating commercially with China, so obviously this situation is going to affect us.“says Dr. Estefanía Cruz Lera.
However, it also highlights that Kamala Harris has not proposed transformations in the tariff system inherited from Donald Trump either. “So there we can see where Harris’ trade policy is going and we should also be concerned about this unclear situation.“.
- At the beginning of this year, in 2024, Mexico became the main exporter to the United States due to the fall in Chinese imports to the North American country: the United States fights to buy less from China and Mexico wants to take advantage of that place.
A few months ago, Republican candidate Donald Trump resumed and intensified threats to increase tariffs against Chinese imports, even if they arrived triangulated from Mexico.
We recommend you: Mexico, open to trade and without restrictions to receive imports from Asia
In this sense and from the National Chamber of Cargo Transportation (Canacar), the Mexican Association of Shipping Agents recalled that Mexico is open to trade and should not have any issue in relation to receiving imports from the Asian country.
He added that Mexico must define strategies to export to various markets such as the American, European and South American markets.