Sheinbaum Holds Cards, Dealing Not Done
President Claudia Sheinbaum greets supporters at El Zócalo in Mexico City, where she delivered a speech addressing her administration, the state of the country, and negotiations with U.S. President Donald Trump on Sunday, March 9, 2025. Photo courtesy of the Office of the Mexican Presidency
Sheinbaum celebrates tariff delay, but looming threat rattles companies on both sides of the border. Fight is far from over, she cautioned.
Editor’s note: This story was co-published with Puente News Collaborative in partnership with palabra. Puente News Collaborative is a bilingual nonprofit newsroom, convener and funder dedicated to high-quality, fact-based news and information from the U.S.-Mexico border.
MEXICO CITY – President Claudia Sheinbaum celebrated big Sunday at El Zócalo, the country’s largest public square in downtown Mexico City, after securing a second delay — at least for another month — on punitive U.S. tariffs targeting all Mexican exports.
The gathering of tens of thousands of supporters, initially planned as a forum to inform Mexicans about her government’s planned retaliation against the 25% levy unilaterally imposed by U.S. President Donald Trump, quickly transformed into a celebration of Mexico’s first female leader and her apparent diplomatic win.
Trump agreed late last week to postpone the tariffs once again. Even more significantly, Sheinbaum said she secured an agreement ensuring that any future levies on Mexico’s U.S. bound exports would be included in a broader reciprocal agreement to take effect in April.
“We are optimistic!” Sheinbaum declared to the cheering crowd. “Because on that day, April 2, the United States government has announced it will impose reciprocal tariffs on all countries in the world. . . and since we do not have tariffs with them, nor do they with us. . . these reciprocal tariffs will not apply.”
El Zócalo, Mexico City’s main plaza, on Sunday, March 9, 2025, where thousands gathered to celebrate with President Claudia Sheinbaum the postponement of U.S. tariffs on Mexican exports for one month. Photo courtesy of the Office of the Mexican Presidency
Despite the celebrations, the battle is far from over. The threat of clashes with the U.S. continues to loom large after Trump designated Mexican drug cartels as terrorist organizations in mid-February. That move fueled speculation that the U.S. administration is considering military action against them in Mexican territory.
Trump's top economic adviser, Keven Hassett, told ABC News Sunday that the administration was using tariffs to launch “a drug war, not a trade war,” with Canada and Mexico.
In linking Mexico’s exports, some 80% of which go to U.S. buyers, to the country’s too often ineffective war on its gangsters, Trump has tapped into Mexico’s biggest vulnerability, experts and industry leaders on both sides of the border say.
The designation threatens future U.S.-Mexico cooperation and could foment antagonism against the U.S. in Mexico if improper actions are taken against Latin America’s second-largest economy, some analysts said. It is keeping citizens and business leaders alike on edge.
Banners opposing tariffs were displayed near downtown Mexico City in support of President Claudia Sheinbaum. This sign reads: “Mexico United, No to Tariffs.” Photo by Eduardo García/Puente News Collaborative
“Issuing a national threat is like throwing a bomb that can explode at any moment,” said Pablo Mijangos Gonzalez, a Mexican historian of politics, religion and laws in Latin America at Southern Methodist University in Dallas. “What does this mean? ... The Mexican government will remain vulnerable, permanently vulnerable to Trump’s extortion threats. What Trump was doing was looking for a weak spot and he found it.”
Meanwhile, with April 2 fast approaching many companies along the border are in a frenzy, preparing for the unknown. Trump’s ever-shifting tariff policy has created a chilling effect, to say the least.
Some companies are pumping the brakes on future investments. Others are stockpiling as much as they can. Warehouses are filling up with as many products as possible, everything from automotive parts, electronic components and other nonperishable items, even tequila and mezcal. The lines of trucks crisscrossing the border create traffic bottlenecks in the race against time.
“A lot of these companies are trying to bring products in before they get slapped with tariffs,” said Jerry Pacheco, president of the Border Industrial Association, in Santa Teresa, New Mexico, near El Paso, Texas.
“It’s just amazingly disruptive to production,” he added of the chaos. “Businesses want stability. They don’t need this kind of environment.”
An industrial park in Ciudad Juárez, Mexico, directly across the border from El Paso, Texas. Companies in El Paso are preparing for uncertainty as the tariff deadline approaches. Photo by Omar Ornelas/El Paso Times/Puente News Collaborative
Trump’s tariff threats come at the worst possible time for Mexico’s economy. The last thing Sheinbaum needed as she took office last October was a trade standoff with Mexico’s largest trading partner.
This will undoubtedly make it harder for Sheinbaum, 62, to achieve her long-term goals and cement her legacy as Mexico’s first female president — one who must now prove she can be both resilient and successful under relentless pressure from abroad and within.
After booming the first half of last year — fueled by government spending on huge and troubled public infrastructure projects and massive spending to boost Sheinbaum’s presidential campaign – economic growth has screeched to a halt.
The country’s gross domestic product (GDP) shrank 0.6% last autumn, marking its first contraction in three years, since the COVID-19 pandemic induced an economic crash in 2020. That crisis shut down most economic activity for nearly three months.
The impact is evident: in the last quarter of last year, Mexico received just $676 million in foreign direct investment, the smallest amount for any three-month period since 1985.
The figure has alarmed economists, who see it as the clearest sign yet that the prospect of a second Trump presidency has scared investors away from Mexico. Already, some U.S. factories along the border have either closed, or have taken a wait-and-see-attitude.
Mexican workers assemble electronic components at the Lacroix factory in Ciudad Juárez, Mexico, that are used in GMC trucks. As the deadline for impending tariffs approaches, some investors have been scared away, while other businesses are bracing for the impact. Photo by Omar Ornelas/El Paso Times/Puente News Collaborative
While Sheinbaum deserves credit for defusing many of the political bombs Trump has thrown at her government, the real dilemma is that she will likely have to navigate these conditions for at least the next four years of Trump’s term, which could be turbulent.
Moreover, Sheinbaum, while drawing a firm line against any unilateral U.S. military strikes on Mexican soil, has repeatedly emphasized her willingness to cooperate in stopping drug trafficking. She’s gone further than his predecessor’s “hugs not bullets” strategy. Her predecessor Andrés Manuel López Obrador focused on what he called the root causes of crime and mostly avoided violent confrontations with criminals. That led to more states falling under the influence of organized crime.
Early March, negotiations to avert the tariffs appeared to be going smoothly — until they weren’t. The breakdown came despite Sheinbaum delivering 29 drug cartel leaders to U.S. authorities, including the leaders of the paramilitary group known as Los Zetas who terrorized cities along the Texas-Mexico border and Rafael Caro Quintero, the much-wanted drug lord accused of orchestrating the 1985 kidnapping, torture, and murder of Drug Enforcement Administration agent Enrique “Kiki” Camarena.
Still, the unexpected dynamic between Sheinbaum and Trump could, at times, work to her advantage — such as leveraging Trump’s pressure to crack down on some of Mexico’s most violent criminal organizations, which control vast territories and, in some cases, have ties to high-ranking government officials.
Sheinbaum has an opportunity to shine here, analysts say, but she must tread carefully. Many security analysts believe that some top-ranking public servants and members of her own party have ties to drug cartels — making this an almost impossible cleanup mission.
“She needs to clean the house,” Mijangos said. “She needs to get rid of some extremely toxic people, beginning with some members of her own political coalition.”
President Claudia Sheinbaum at the rally she organized on Sunday, March 9, 2025, to celebrate U.S. President Donald Trump’s decision to postpone tariffs. Photo courtesy of the Office of the Mexican Presidency
On other fronts, however, Trump’s constant threats could become a major source of distraction, pulling her away from the domestic priorities she hoped to focus on — most notably, fixing the dire fiscal situation she inherited from López Obrador.
Sheinbaum understands that Trump could reverse course at any moment, making this latest reprieve just another temporary victory. She also knows the battle is far from over. Trump’s unpredictability remains a constant threat, something she has learned firsthand. Perhaps that’s why she insists on cooler heads prevailing in the fluidity of the bilateral relationship.
Far from generating nationalism, Sheinbaum reminded her supporters that the United States, which ended up with half of Mexico’s territory under the 1848 Treaty of Guadalupe Hidalgo, lent its support on several critical historical occasions.
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“I also want to highlight the good examples of respect for our sovereignty from the United States,” Sheinbaum told the massive crowd, listing several historical examples of its northern neighbor supporting Mexico. For example, in 1861 Mexico’s legendary president, Benito Juarez, received invaluable help from his U.S. contemporary, Abraham Lincoln, in Mexico’s fight against a French invasion. “The U.S. never recognized the second empire” of French envoy Maximiliano de Habsburgo, Sheinbaum reminded.
Unfortunately for Sheinbaum, the sword-like threat Trump is dangling over her head is even sharper than initially thought — not only because of the threat itself, but because he has repeatedly shown disregard for honoring agreements once they are signed, including the US-Mexico-Canada trade pact negotiated during his first term as president.
Shannon O’Neil, a senior fellow for Latin American studies at the Council on Foreign Relations and author of The Globalization Myth: Why Regions Matter, said: “This administration doesn’t care about the niceties of treaties and the rules within them.”
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Eduardo García established Bloomberg’s Mexico bureau in 1992 and served as its leader until 2001, overseeing the agency’s award-winning coverage in the country. In 2001, he embarked on a new venture by founding his own news organization, Sentido Común. For nearly 18 years, he guided Sentido Común to become one of Mexico's most esteemed financial websites. He later merged his company with the local financial news agency Infosel, assuming roles as Editor-in-Chief and subsequently Chief Content Officer. @egarciascmx
Alfredo Corchado is the executive editor for Puente News Collaborative and the former Mexico/Border Correspondent for The Dallas Morning News. He’s the author of “Midnight in Mexico” and “Homelands.” He graduated from the University of Texas at El Paso and was a Nieman Fellow at Harvard. @ajcorchado
Angela Kocherga is an award-winning multimedia journalist who has dedicated her career to reporting about the Southwest border and Mexico. In 2019 she earned a Maria Moors Cabot Prize from Columbia University for courageous reporting in Latin America. She served as Mexico bureau chief and border correspondent for a group of U.S. television stations. Kocherga currently is news director for public radio station KTEP in El Paso and contributes stories to the Texas Newsroom and NPR. @AngelaKBorder
Omar Ornelas is a Mexican photojournalist based in Ciudad Juárez, Mexico. For the last 20 years, he has been reporting on and photographing farmworker labor, education, health and housing issues in California, Texas and Arizona, as well as border security and Mexican and Central American migratory flows at the U.S.-Mexico border, for the USA TODAY Network. @fotornelas
Dudley Althaus has reported on Mexico, Latin America and beyond for more than three decades as a staff newspaper correspondent. Beginning his career at a small newspaper on the Texas-Mexico border, Althaus had an award-winning 22-year stint as Mexico City bureau chief of the Houston Chronicle. After a four-year run as a Mexico correspondent for The Wall Street Journal, Althaus covered immigration and border issues as a freelancer based in San Antonio for Hearst Newspapers. He has covered every Mexican presidential election since 1988, when Mexico's troubled transition to democracy began. @dqalthaus