Monday, June 23, 2025

Moody’s: US tariffs could cost Mexico’s GDP growth 1 percentage point

United States President Donald Trump’s proposed tariffs on Mexico could limit economic growth to 0.6% in 2025, financial services company Moody’s Ratings warned on Monday. 

“Our estimates indicate that the Mexican economy would lose around 1 percentage point of growth in 2025. We are estimating that Mexico would only grow 0.6% this year,” said Director of Economic Analysis for Latin America at Moody’s Analytics Alfredo Coutiño in an online conference Tuesday. 

Posed photo of Moody's Director of Economic Analysis for Latin America Alfredo Coutiño in front of a window looking out onto a city skyline.
Alfredo Coutiño also predicted Monday that U.S tariffs could cause rising inflation in Mexico and peso depreciation. (LinkedIn)

On his first day in office Monday, President Trump announced plans to introduce 25% tariffs on products from the U.S.’s two main trading partners, Mexico and Canada, starting February 1. 

On January 17, the International Monetary Fund predicted Mexico would see economic growth of 1.4% in 2025. The revised Moody’s forecast suggests growth may falter in the wake of U.S. tariffs causing trade to slow. 

This could also harm Mexico’s nearshoring efforts, which President Claudia Sheinbaum has been encouraging through her term-long Plan México strategy, which is aimed at luring more foreign investment to Mexico.

Coutiño also warned that tariffs could cause inflation to rise and the peso to depreciate, which may prompt Mexico to tighten its monetary policy. 

“The tariff and protectionist policy of the United States government will have an effect on investment flows due to the relocation of companies, not only from the U.S. but from other parts of the world, particularly Asian companies that wanted to reach the Mexican market,” said Coutiño.

By contrast, Moody’s Ratings predicts that the Latin American region will experience greater GDP growth in 2025, of around 2.1%. 

This view is also shared by the World Bank, which projected 2.6% growth for the Latin America and the Caribbean region in late 2024. In an October report, the organization predicted Mexico would lag behind its neighbors with just 1.5% growth, the third lowest among all regional nations. 

With reports from Forbes

Have something to say? Paid Subscribers get all access to make & read comments.
An AI robot hand reaches out to touch a human hand

How do we make sure that AI doesn’t make us dumber? A perspective from our CEO

11
AI can make us smarter or it can make us lazier. CEO Travis Bembenek shares how Mexico News Daily is working to offer readers the good kind of AI.
A screwworm fly, possibly

Fight against screwworm ramps up with reopening of sterile fly plant in Chiapas

0
Sterile flies were key to Mexico's past success in exterminating screwworm. Now that the pest is back, the US is offering $21 million to reopen the production facility.
CJNG cartel leaders El Mencho and Ricardo Ruiz

US sanctions CJNG leaders, citing TikTok influencer’s murder

3
People in the United States are now blocked from any transaction involving property that the five sanctioned cartel leaders have an interest in.