The American Society of Mexico (Amsoc), a community organization focused on bilateral development, said on Wednesday that “Mexico has the most to lose” if a trade war begins with the U.S.

“Both Mexican and American businessmen do not benefit from any type of action by either the Mexican government or the American government, but I think it is very important that instead of escalating the situation, a common understanding is sought,” Amsoc President Larry Rubin told the media outlet El Financiero.

Amsoc’s claim follows U.S. President-elect Donald Trump’s pledge this week to impose a 25% tariff on all Mexican and Canadian exports to the United States upon assuming office on Jan. 20. 

Trump cited illegal migration and the “flow of fentanyl and other drugs” via Mexico for the decision to impose the tariff on Mexico.

President Claudia Sheinbaum implied on Tuesday that any U.S. tariffs would be met with reciprocal measures on U.S. exports to Mexico and warned that such a scenario would hurt U.S. companies doing business in Mexico. 

“Cooperation and reciprocal understanding of these great challenges is needed. To one tariff another will come in response…until we place common companies at risk,” Sheinbaum said in a letter addressed to Trump, which she read out during her morning press conference on Tuesday. 

“I believe that dialogue is the best path for understanding, peace and prosperity in our nations. I hope that our teams can meet soon,” she concluded. 

Response by Mexico’s private sector

Several private-sector representatives have responded to Trump’s call for tariffs on its North American neighbors, with many stressing the importance of the continuity of the USMCA free trade agreement between the U.S., Mexico and Canada. 

“We have to learn to negotiate and talk with our North American suppliers,” President of the National Association of Importers and Exporters of the Mexican Republic (ANIERM) Gerardo Tajonar Castro told El Financiero. “The type of trade war that could arise does not suit us because there would be retaliation from Mexico…”

Meanwhile, Mexico City Chamber of Commerce, Services and Tourism (Canaco) President José de Jesús Rodríguez told attendees of the Canaco Forum that Mexico is the United States’ main commercial partner, “and they [the U.S.] cannot hang themselves.”

“And the problem between China and the United States, which is geopolitical, [is] very complicated,” de Jesús added. 

He appealed for calm. “The only alternative they have is Mexico; we are their main supplier, so let’s not lose sight of that,” he said. 

Other experts also pointed to the highly intertwined trade relationship between the U.S., Canada and Mexico. 

“Trump’s bet is risky since the U.S. economy depends enormously on the Mexican and Canadian markets for its exports, as well as on the inputs from these countries for its industrial production. It is a shot in the foot,” Kenneth Smith Ramos, a former negotiator of the USMCA, told El Financiero. 

With 53 days left until Trump takes office, it is unclear if the threat to levy the tariffs is serious or not, or whether the move is an attempt to score an early political win in the ongoing dispute over the U.S.-Mexico border. 

Despite President Sheinbaum’s implied threats on Tuesday about imposing retaliatory tariffs on U.S. goods she has not given any specifics about how Mexico would respond. 

With reports from El Financiero