MXPE Weekly Essentials

Mexico’s best retaliation is inaction, productivity to replace imports, oil quagmires, and other highlights in Mexican politics, policy, and markets from the past week.

Mexico needn’t do anything to hit back at the United States.

This might seem counterintuitive given Donald Trump’s promise to impose 25% tariffs on all Mexican imports. A third of Mexico’s GDP depends on exports and 80% of that depends on the US, so retaliation might seem like a good way of standing up to the bully up north. There is a better way, and that is to do little to nothing.