Mexican Peso Declines After Tariffs are Revealed
The exchange rate rose after a volatile session as investors awaited details on U.S. President Donald Trump’s tariff plans.
On Wednesday, the Mexican peso depreciated against the dollar, retreating in a turbulent trading session ahead of Trump’s much-anticipated announcement on new tariffs.
By the end of the session, the exchange rate stood at 20.4556 pesos per dollar, compared to 20.3331 pesos the previous day, according to official data from the Bank of Mexico (Banxico). This movement represented a loss of 12.25 cents, or 0.60%.
The dollar traded within a range, reaching a high of 20.5421 pesos and a low of 20.3167 pesos. Meanwhile, the U.S. Dollar Index (DXY)—which measures the greenback against a basket of six major currencies—fell 0.45% to 103.75 points.
Market Concerns Over Tariff Policies
Trump, who had been referring to this Wednesday as “Liberation Day” in anticipation of imposing reciprocal tariffs on all countries, kept investors on edge as they awaited details on this new round of trade measures.
Additionally, the U.S. Department of Commerce expanded Trump’s 25% tariffs on aluminum products to include beer and empty aluminum cans. This tariff, separate from other duties, is set to take effect this Friday.
In 2023, the U.S. imported $411 million worth of aluminum cans, making it the fifth-largest importer of this product. Mexico was the top supplier, exporting $169 million worth of cans to the U.S., followed by Canada ($55 million).
Further escalating concerns, Trump’s 25% tariffs on automobiles are expected to take effect tomorrow. Experts warn that these tariffs could significantly impact the Mexican economy, given the crucial role of manufactured exports to the U.S.
Trump Takes Aim at USMCA
Mexican President Claudia Sheinbaum Pardo has stated that her administration will respond to Trump’s tariffs but does not believe in retaliatory “eye for an eye” measures.
Meanwhile, in his speech today, Trump criticized the United States-Mexico-Canada Agreement (USMCA), calling it a “disaster” and “the worst deal in the country’s history.” He announced his intention to seek congressional support to dismantle the trade pact.
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