Business
How Trump tariff threats might plunge Mexico into recession and stoke immigration
If former President Trump is reelected and follows through with his promise to slap new tariffs on all imports to the U.S., experts say much of the global economy could be upended. And few countries would be more vulnerable than Mexico.
The economy here is driven almost exclusively by trade, with 83% of exports sent north of the border.
Mexicans are watching the U.S. election anxiously, and bracing for a possible Trump victory over the Democratic nominee, Vice President Kalama Harris. Last week, the peso lost value after polling showed that the former president had taken a slight lead in several swing states.
Economists warn that even a small increase in tariffs on Mexico’s goods could lead to a rise in unemployment and poverty, and some say that could prompt more people to migrate to the United States.
“Even the threat of tariffs will create havoc,” said Juan Carlos Moreno-Brid, an economics professor at the National Autonomous University of Mexico. “It will further reduce Mexico’s long-term economic growth. And it could drive migration to the United States and Canada.”
A worker packages Little Tikes baby swings at the MGA Entertainment factory in Ciudad Juarez, Mexico.
(Bloomberg / Getty Images)
Few world economies are more tightly bound than those of the U.S. and Mexico.
In 2023, U.S. exports of goods and services to Mexico totaled $367 billion and imports from Mexico exceeded $529 billion, according to the U.S. Department of Commerce. Mexico is the United States’ largest trading partner, having overtaken China in 2021.
Trump, who has long complained about the exodus of manufacturing jobs from the U.S. to countries such as China and Mexico, says that tariffs will help lure factories back to the United States.
Economists, though, are largely skeptical of that claim. And there’s some evidence that higher tariffs enacted during his presidency have cost American jobs. Many warn that U.S. companies would end up absorbing much of the new taxes, a cost they would pass on to U.S. consumers.
Some economists predict a 20% tariff imposed by Trump would end up costing the average U.S. family $2,600 each year. Harris says it could be higher, adding nearly $4,000 a year to the typical household’s bills, an increase she calls a “Trump sales tax.”
It’s difficult to say exactly what new tariffs would mean for the U.S. and the rest of the world because Trump’s proposals keep changing.
He has vowed, at various points, to impose an across-the-board tax of 10% or 20% on all goods entering the U.S. He’s also threatened tariffs of 60% or higher on imports from China.
In an interview this month with Fox News, he threatened to impose an exorbitant tax on autos imported from Mexico. A big chunk of U.S.-Mexico trade involves cars and auto parts that are transported back and forth across the border for production and final assembly.
“All I’m doing is saying, I’ll put 200[%] or 500%, I don’t care,” Trump said. “I’ll put a number where they can’t sell one car.”
New tariffs could trigger global trade wars because countries would probably retaliate with their own taxes on U.S. imports, targeting in particular farm goods because of the politically sensitive nature of that sector. The International Monetary Fund predicts growth would decelerate worldwide.
Donald Trump has vowed to impose a tariff of 10% or 20% on all goods entering the U.S. and threatened an exorbitant tax on autos imported from Mexico: “I’ll put 200[%] or 500%, I don’t care.”
(Rebecca Blackwell / Associated Press)
But countries such as Mexico, which relies heavily on exports for economic growth, would be especially affected.
The value of Mexico’s exports and imports amounts to almost 90% of the country’s gross domestic product, according to World Bank data. Economists warn that even a small increase in tariffs on goods destined to the U.S. poses serious risks for the economy.
“Under the worst-case scenario, the Mexican economy will fall into recession, the currency will depreciate, and inflation will rise,” reads a report released this month by the economic research firm Moody’s Analytics.
The mere threat of tariffs has already scared off foreign companies from investing in Mexico. Tesla, for example, announced that it was pausing plans to build a new factory in Mexico until after the election because of Trump’s vow to levy taxes against auto imports.
Trump appears willing to target individual companies doing business here, recently threatening 200% tariffs on John Deere if the tractor manufacturer moves production and jobs to Mexico.
“The threat of tariffs and the erratic nature in which Trump might deploy them doesn’t offer any investment certainty,” said Rodrigo Aguilera, an independent economist.
As president, Trump in 2018 imposed tariffs on steel from Mexico and other countries, prompting counter-tariffs on American farm goods and straining U.S.-Mexico relations.
He also threatened broader tariffs on all Mexican goods, but backed off after American business leaders complained that it would hurt them and his administration extracted a promise from Mexican authorities to do more to stop migrants from reaching the U.S. border.
Some Mexican officials have said they don’t believe Trump will follow through with his tariff threats, which aren’t popular in the U.S. and seen as counterproductive for the American economy.
Marcelo Ebrard, Mexico’s economy secretary, told journalists recently that he believes they are just a campaign tactic. “The United States economy is not a manufacturing economy,” Ebrard said. “And I’m sorry, but it will not be that way again.”
But others fear that Trump, if he wins a second presidency, will be more likely to take dramatic measures on an array of policies because it is likely he would be surrounded by more loyalists.
“Trump is not going to be moderated by more moderate conservatives,” said Pamela K. Starr, a professor of international relations at USC. “The second presidency, I think, will be Trump unleashed.”
Rodrigo Aguilera, an independent economist, said there is no doubt that Trump will “use a tariff threat to force Mexico to collaborate on something he wants, on migration policy or security policy.”
“Mexico,” he said, “will have to try to capitulate.”
If Trump enacts tariffs on Mexico, it would be in violation of the U.S.-Mexico-Canada Agreement, a 2020 treaty that replaced the Clinton-era North American Free Trade Agreement. The new treaty, which Trump helped negotiate, calls for generally no tariffs on trade on the North American continent. If the U.S. violated the agreement, Mexico would have permission to retaliate.
When they overlapped in office, Trump and former President Andrés Manuel López Obrador came to an unexpected detente. López Obrador said the two countries’ relationship was built on mutual respect, and famously called Trump “a friend.”
Many think such a relationship may be less likely with the country’s new president, Claudia Sheinbaum, and Trump, in part because he doesn’t have a good track record of working with female heads of state.
“She’s really smart and a woman, all things that Trump seems to find threatening,” Starr said.
Sheinbaum has largely refrained from commenting on Trump’s tariff threats, except to say that it is the U.S., as much as Mexico, that would suffer if they came to pass.
Free trade, she said recently, “is as important for the United States as it is for Mexico.”
Sheinbaum, who took office this month, inherited an economy that was already on shaky ground. The country faces its largest budget deficit since the 1980s. And while the social programs carried out by her predecessor helped lift some Mexicans from poverty, 36% of the population is still poor, with 7% living in extreme poverty.
Recent developments in domestic politics in Mexico have spooked some investors. Business groups have criticized an ongoing plan to overhaul Mexico’s justice system, which some say will undermine the independence of judges.
In Mexico and much of Latin America, poverty has a direct link to immigration. A severe recession in Mexico in the 1990s contributed to some 5 million Mexicans immigrating to the U.S.
Times staff writer Don Lee contributed to this report.
Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.
As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.
Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.
Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.
That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.
“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”
The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.
The Data Center Coalition, an industry trade group, expressed disappointment in the vote.
“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.
“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”
SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.
The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.
City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.
There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.
“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.
Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.
California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.
That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.
In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.
Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
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