Mexico's Sheinbaum: Popularity as a Tariff Shield

Mexico President Claudia Sheinbaum's high approval rating may provide a buffer against the economic fallout from U.S. tariffs, but her government must act swiftly and strategically to mitigate potential damage.

Mexico's President Claudia Sheinbaum has seen her popularity soar in the face of U.S. President Donald Trump's tariff threats and perceived bullying. With an approval rating of 85%, up 15 points since October, Sheinbaum has successfully appealed to Mexican nationalism and pride, rallying the public behind her government's response to the tariffs. However, her political capital may not be enough to insulate Mexico from the economic devastation that could result from a prolonged trade war.



Mexico's economy is heavily reliant on trade with the U.S., with over 80% of its exports heading north. The 25% tariffs imposed by the U.S. could lead to export losses of up to $42 billion and a potential 4% hit to Mexico's GDP, according to a report by the Wilson Center. The tariffs could also boost inflation, disrupt economic trade flows, and slow economic growth for both countries, as warned by Gabriela Siller of Banco Base.

To mitigate the potential economic damage from U.S. tariffs, Mexico can take several strategic measures:

1. Diversify Trade Partners: Mexico can reduce its dependence on the U.S. market by increasing trade with other countries. Strengthening ties with other Latin American countries through regional trade agreements like the Pacific Alliance and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) can help. Exploring new trade opportunities with Asia, Europe, and Africa, as well as encouraging foreign direct investment (FDI) from non-U.S. countries, can also boost domestic production and exports.
2. Promote Domestic Production and Consumption: Mexico can stimulate its domestic economy by implementing policies that encourage local production and consumption. Tax incentives and subsidies for domestic industries, investments in infrastructure and education, and a "Buy Mexican" campaign can all help to promote domestic consumption and reduce the impact of tariffs.
3. Negotiate with the U.S.: Mexico can engage in negotiations with the U.S. to find a mutually beneficial solution to the trade dispute. Addressing U.S. concerns about migration and security while protecting Mexican interests, seeking a compromise that minimizes the impact of tariffs on both countries' economies, and leveraging Mexico's strategic importance as a trade partner to the U.S. can all help to achieve a favorable outcome.
4. Strengthen Social Safety Nets: To mitigate the impact of tariffs on Mexican consumers, the government can expand social welfare programs to support vulnerable populations, implement price controls or subsidies on essential goods, and encourage remittances from Mexican workers abroad by facilitating money transfers and providing incentives for families to save.
5. Appeal to Nationalism and Unity: President Sheinbaum can rally Mexican citizens around the flag and foster a sense of national unity in the face of U.S. tariffs. Organizing public events and rallies, emphasizing Mexico's sovereignty and independence in public speeches and statements, and encouraging Mexican consumers to boycott U.S. products and support domestic alternatives can all help to maintain public support for her government's response to the tariffs.



In conclusion, President Claudia Sheinbaum's high approval rating may provide a buffer against the economic fallout from U.S. tariffs, but her government must act swiftly and strategically to mitigate potential damage. By diversifying trade partners, promoting domestic production and consumption, negotiating with the U.S., strengthening social safety nets, and appealing to nationalism and unity, Mexico can navigate the trade dispute while also promoting long-term economic growth and development.