United States vs. Mexico: Tariffs & Military Intervention

United States vs. Mexico: Tariffs, Military Intervention, and the New Strategy for Trade Control

The recent imposition of a 25% tariff on Mexican products entering the United States marks an escalation in economic and political tensions between the two nations. According to Donald Trump’s administration, this measure responds to the lack of progress in the fight against organized crime and illegal migration. However, this policy goes far beyond simple trade retaliation: it is part of a broader strategy to assume control over bilateral trade and justify a possible military intervention in Mexico.

This situation will not only impact diplomatic relations between the two countries but will also have devastating consequences for their economies and societies. In this article, we analyze key aspects of the impact of this decision on trade, industry, investment, and employment, while also evaluating the hidden intentions behind this strategy and its possible future scenarios.

Economic Impact of Tariffs: Billion-Dollar Losses for Both Countries

Mexico: An Economy at Risk

Mexico is the United States’ top trading partner, with annual exports exceeding $450 billion. With the imposition of a 25% tariff, key sectors will suffer significant losses:

Automotive Industry: Mexico exports more than $100 billion in vehicles and auto parts to the U.S. Tariffs will increase costs, reducing competitiveness and impacting thousands of jobs in both nations.
Agriculture: Mexico is the primary supplier of products such as avocados, tomatoes, and berries, with exports exceeding $30 billion annually. This sector will suffer directly from the increased costs.
Manufacturing and Technology: Mexican companies export more than $70 billion in electronics and machinery. A 25% tariff will severely affect foreign investment and production.

United States: A Blow to Its Own Industry

While the Trump administration argues that tariffs will boost domestic production, the impact could be counterproductive:

Higher prices for consumers: With increased costs on goods imported from Mexico, U.S. consumers will pay more for cars, food, and consumer goods.
Job losses in the U.S.: Industries dependent on Mexican imports, such as automotive and technology sectors, may face layoffs due to higher production costs.
Decline in foreign investment: The uncertainty generated by these aggressive policies may deter foreign companies from investing in the United States and Mexico.

The Real Objective: Justifying Military Intervention in Mexico

Beyond the economic impact, the imposition of tariffs and the narrative about the Mexican government’s inefficiency in combating organized crime seem to be part of a larger strategy: a U.S. military intervention in Mexico.

Militarization of the Border: The deployment of the National Guard and the reinforcement of border infrastructure have been justified as measures against drug trafficking and migration but also create a scenario conducive to future military actions.
Designation of Cartels as Terrorist Organizations: By officially classifying them as such, a legal precedent has been set for covert operations and direct military interventions in Mexican territory.
Economic Benefits of War: The U.S. defense budget exceeds $800 billion annually. A military intervention in Mexico would justify increased spending on weaponry, benefiting the military-industrial complex and creating jobs in that sector.

Possible Scenarios for the Coming Years

Scenario 1: Mexico Accepts U.S. Conditions

To avoid further sanctions, Mexico might concede and accept:

Increased presence of U.S. agencies in operations against organized crime.
Stricter trade regulations favoring the U.S.
Investments conditioned on U.S. control over strategic sectors.

While this might mitigate the economic crisis, it would mean a loss of sovereignty and even greater dependence on the U.S.

Scenario 2: Mexico Implements Trade Retaliation

Mexico could impose tariffs on U.S. products, impacting:

Agriculture: Mexico is a major importer of corn, meat, and dairy products from the U.S.
Automotive Industry: Many auto parts and assemblies come from the U.S., so retaliatory measures would affect both sides of the border.
Energy: Mexico imports large amounts of natural gas from the U.S., which could become a bargaining tool.

However, a trade war would only deepen the crisis in both economies.

Scenario 3: Crisis and Possible Military Intervention

If tensions continue to escalate, the U.S. might justify more aggressive actions, including:

Covert military operations in regions with a strong presence of organized crime.
Extreme economic pressure to force changes in Mexico’s security policies.
Armed conflict that could destabilize all of North America.

But What Benefits Does the U.S. President Expect to Gain?

1. Political Benefits for Trump

Strengthening his electoral base: By taking a hardline stance against Mexico and illegal immigration, Trump reinforces support from his most conservative and nationalist voters, who see these measures as defending sovereignty and national security.
Distracting from internal issues: By focusing discourse on external threats like drug trafficking and migration, he diverts attention from economic problems or political controversies at home.

2. Economic Benefits for U.S. Business and Industries

Protection of manufacturing and steel industries: Tariffs on steel and aluminum benefit local producers by making Mexican and Canadian competition more expensive, forcing more companies to buy American products.
Greater negotiation leverage: U.S. companies dependent on Mexican imports could use this threat as leverage to renegotiate contracts under more favorable terms.
Advantages for security and defense corporations: Labeling cartels as terrorist groups could justify larger contracts for military, surveillance, and border security technology companies.

3. Strategic Benefits for the U.S. in the Global Context

Strengthening nearshoring within the U.S.: Companies planning to set up in Mexico might reconsider and seek options within U.S. territory if export costs from Mexico increase.
Pressure on Canada and Mexico in future negotiations: By setting a precedent for trade sanctions, the U.S. reinforces its ability to pressure in other economic disputes.
Influence over Mexican policy: An aggressive stance could force Mexico to align with certain U.S. strategic or economic decisions, such as stricter immigration regulations or enhanced security cooperation.

4. What About the U.S. Public?

The benefits for the general U.S. population are ambiguous and debatable. While some sectors might see a slight short-term economic boost, there would also be significant downsides:

Higher consumer prices: Tariffs on steel, aluminum, and other imported goods from Mexico will raise final product costs in the U.S., affecting consumers and small businesses.
Labor shortages in key industries: Deporting immigrants would reduce the workforce in industries such as construction, agriculture, and services.
Possible trade retaliation: Mexico and Canada would likely respond with tariffs on U.S. products, harming American agricultural and manufacturing exporters.

What Are Mexico’s Alternatives?

To counter U.S. trade and military threats and strengthen its economic activity, Mexico must implement key strategies that increase trust and collaboration with the U.S. government, while reducing its dependence on the neighboring country’s market and reinforcing its economic and security sovereignty. Three of the most important are:

1. Full Commitment to the Fight Against Organized Crime Through a Joint Strategy with the U.S.

To avoid the justification of foreign military intervention and to strengthen internal security, the Mexican government must make an absolute commitment to combat organized crime, through a coordinated strategy with the United States without ceding sovereignty. This implies:

Strategic collaboration with U.S. agencies such as the DEA, the FBI, and the Department of Homeland Security, with well-defined agreements that respect Mexican autonomy.
Modernization of Mexican security forces, with investment in intelligence, surveillance technology, and a more efficient judicial system to dismantle criminal networks.
Greater control on the common border, to stop drug, arms, and illicit money trafficking, strengthening the exchange of information between both countries.
Plan for the recovery of territories dominated by crime, with support from the army and the National Guard, ensuring stability in affected communities.

2. Boost National Industries and Market Diversification

Strengthen industrialization in key sectors like advanced manufacturing, technology, and renewable energy.
Support small and medium-sized enterprises (SMEs) with tax incentives, accessible financing, and infrastructure investment to enhance competitiveness.
Expand export markets by strengthening trade relationships with Europe, Asia, and Latin America, reducing reliance on the U.S.

3. Increase Investment in Science, Technology, and National Security

Invest in education and technology, promoting sectors such as artificial intelligence, aerospace, and biotechnology.
Strengthen national security through intelligence against organized crime, preventing pretexts for foreign interventions.
Attract foreign direct investment (FDI) from countries like Germany, Japan, and Canada to develop strategic sectors and ensure economic stability.

With a comprehensive approach and zero tolerance for corruption, Mexico can strengthen its rule of law, avoid US military pressure, improve its economic competitiveness, create a safer environment for investment and trade, generate growth, and consolidate its commercial and political independence.

Conclusion: A New Economic and Military Order in North America

The imposition of a 25% tariff is not just a commercial tactic; it is part of a broader U.S. strategy to reinforce its control over trade and security in North America. Under the pretext of fighting crime and curbing migration, the Trump administration seeks to strengthen its economy through military spending and direct intervention in Mexico.

If Mexico does not respond with a clear strategy, the country could face a deep economic crisis and an unprecedented risk to its sovereignty. Trade war and military intervention are not distant scenarios but increasingly real threats.