Mexico lowers 2025 growth forecast due to trade war concerns

Mexico’s government significantly reduced its 2025 economic growth forecast on Tuesday, citing fears of uncertainty surrounding potential US tariffs to be imposed by President Donald Trump.

Trump is expected to announce new tariffs on Wednesday, targeting all countries that impose taxes on American imports, in addition to existing levies on steel and aluminum, and upcoming tariffs on car imports.

With more than 80 percent of Mexican exports heading to the United States, Mexico remains its largest trading partner. Many Mexican factories are dedicated to assembling vehicles for foreign companies, including Ford, General Motors, BMW, Volkswagen, and Toyota.

The Mexican finance ministry revised its growth forecast for 2025 to a range of 1.5 to 2.3 percent, down from the previous projection of 2.0 to 3.0 percent made in November. The ministry attributed the revision to an “uncertain external environment” influenced by global trade tensions and geopolitical conflicts.

Earlier, Mexico’s central bank also revised its forecast downward, projecting only 0.6 percent growth due to ongoing uncertainty emanating from Washington.

In response to the tariff situation, President Claudia Sheinbaum stated that she does not support an “eye for an eye” approach to retaliating against potential US tariffs.