How Mexico’s President Is Dealing with the New US Policy

The “Trump system” is a daily stress test – for American democracy, for US partners, and for the already-eroding rules-based order. Mexico feels the effects of this stress particularly strongly. As one of only two direct neighbours of the US alongside Canada, Mexico has been a preferred target of Donald Trump’s political attacks from day one. However, precisely for this reason, Mexico is now far ahead of many other governments in dealing with Trump’s second term. Indeed, the nation has had four years to prepare – unlike most European countries, which turned a blind eye and a deaf ear to the dreaded prospect of his return.

Thus far, Trump’s return has mainly meant stress, turns, and threats for Mexico – whether over punitive tariffs or talk of a possible military intervention to combat drug cartels. However, just as during Trump’s first term, the actual consequences have been less severe than feared. When Mexico’s President Claudia Sheinbaum took office in autumn 2024, she had barely four months to adapt to Trump. She has adopted a factual, level-headed approach, avoiding public confrontation while consistently emphasising Mexico’s national sovereignty and its claim of conducting bilateral relations with the US on equal terms.

Mexico can hardly be described as a casualty of Trump’s wrecking-ball policies, though the line between friend and foe has always been extremely thin. Trump and his advisers are well aware of Mexico’s strategic importance – above all in economic terms.¹ However, they simply cannot afford an open trade war with Canada and Mexico, who are their free trade partners under the USMCA². The North American value chains are too interdependent, the financial markets too jittery, and the car industry too influential, with production facilities in Mexico that are essential to the US economy. Moreover, Mexico holds the key to several of Trump’s political priorities, especially migration and drug-related crime. Mexico City is well aware of this leverage, which provides a degree of negotiating space. Nevertheless, Trump’s volatility should never be underestimated. In his impulsiveness, he is prepared to harm even his own country and its interests if doing so inflicts greater damage elsewhere.

Mexico’s interests in this asymmetric relationship are clearly defined: Access to the US market under the USMCA free trade agreement must be secured by avoiding sanctions and tariffs, while the country’s political sovereignty must remain intact. Mexico’s scope for action is limited. Pragmatism and restraint serve it well – but never subservience. Emphasising shared interests and occasionally showing understanding for US positions form part of an overall de-escalatory approach. Under Sheinbaum’s leadership, Mexico has learned to live with Trump even better than before, though there is little the country can do to proactively influence the course of the relationship.

Unequal neighbours

Relations between Mexico and the US are marked by historical rivalry, intergenerational family ties, national traumas, and above all, deep developmental disparities and dependencies. In short, these relations could hardly be more complex. The two countries share a 3,145-kilometre border – one of the world’s most dangerous, and yet the border region is also among the most productive globally.

When the NAFTA³ agreement came into effect in 1994, North America formally became a free trade area. This status accelerated the relocation of industries from the US, which politicians – above all, Trump – later exploited in order to stoke resentment against globalisation, Mexican migrants, and the loss of industrial jobs. Restructuring cost hundreds of thousands of jobs in the old industrial regions of the US Rust Belt, many of which were relocated to Mexico due to its lower production and labour costs.

In turn, Mexico benefited from significant industrialisation and integration into global trade flows – albeit at the price of deep internal inequalities. While northern Mexico is closely intertwined with its powerful neighbour, boasting top-tier industrial and infrastructural development, the south presents socio-economic conditions that would hardly be expected in an OECD country. At the same time, Mexico is a member of the G20 and has set itself the clear goal of joining the world’s ten largest economies in the long term.⁴

Trade relations between Mexico and the US are highly developed, with both economies being interdependent in several key industries. Each country is the other’s most important trading partner: In 2024, 16 per cent of all US imports came from Mexico – putting it ahead of China and Canada⁵ – while more than 80 per cent of Mexican exports went to the US.⁶ The Mexican economy is thus heavily dependent on its northern neighbour, though the US economy likewise relies on Mexico as a production base for car manufacturers and as a supplier of intermediate goods such as cables, chemicals, metals, and electronics. An estimated five million US jobs depend on trade with Mexico.⁷

Socio-cultural overlaps and their political implications are equally significant. Around 38 million Americans⁸ – that is, over 11 per cent of the population – have Mexican roots. In addition, depending on the political and economic climate, an estimated four million Mexicans⁹ live in the US without documentation, performing vital yet often poorly paid labour in construction, in agriculture, and in the service sector.

This demographic weight now translates into growing political influence, especially in the southwestern states. In several swing states, Mexican Americans also play an increasingly decisive role in elections. Their concerns are gaining prominence in political debate, and their representation in Congress and state legislatures continues to grow.

Mexican emigrants are therefore of major importance to the US state and society – but they are also crucial to their country of origin, not least in economic terms. According to official figures, around 64.7 billion US dollars were sent back to Mexico last year in the form of remittances (remesas), which corresponds to 3.5 per cent of GDP. More than 95 per cent of these remittances came from the US.¹⁰ This money flows directly to families in structurally weak regions, thereby providing a stabilising force in the fight against poverty. Even small fluctuations – due to more restrictive migration policies, for instance – can have a significant socio-economic impact within Mexico.

Donald Trump and Mexico – A relationship of its own

Politician Donald Trump is scarcely conceivable without Mexico. Indeed, Mexico is essential when it comes to understanding Trump’s political success and the global phenomenon he both unleashed and personifies. Trump’s 2016 election victory was built – quite literally and symbolically – on the US’s southern neighbour and its people. From the outset, Mexico served as a stand-in for everything that in Trump’s view was wrong with the US. The wave of dynamic globalisation since the 1980s made the US wealthier at the top yet left its middle class – the core of American society – relatively poorer.¹¹ Industries moved abroad, while migrants from Latin America moved in. Much of this industrial flight went southwards to Mexico under NAFTA, only reinforcing the feeling that the US was growing poorer to the benefit of other countries.

Many sociological, psychological, and economic factors may have played a part in this development, yet the steadily rising share of Hispanics¹² in the population – and their improving living standards alongside the relative and absolute decline of the white middle class – created ideal conditions for Trump’s rhetoric. For many voters, the “provocation” of a Black president completed the picture. With Trump’s impulsive rhetoric and his performance as a down-to-earth spokesman for “real America” who would bring the detached Washington elite back to reality, he became increasingly attractive to many citizens. Mexicans featured again and again in his speeches as a point of reference and a scapegoat – a stand-in for all migrants as well as for criminal activity. They were the central motif of a campaign strategy that was as simple as it was successful.

Mexico became the symbol of a new border policy – “We will build a wall!” Migrants from the south – labelled indiscriminately as “Mexicans”, regardless of their actual origin – were accused of bringing drugs and violence into the country and were to be deported or – preferably – prevented from entering in the first place. Controversial though it was, the wall became the defining symbol of a new American isolationism – an attitude that had supposedly been left behind when the US entered the Second World War. The wall stood for a renewed assertion of sovereignty, which was defined first and foremost by control over a territory and its borders. At the same time, Mexico became a proxy for a much broader debate about cultural identity and demographic change within the US.

In this discourse, the wall also stood for globalised trade – “They are taking your jobs!” To many in rural America, free trade and globalisation had harmed the middle and working classes while benefiting foreign countries – Mexico among them. The corporations and their owners – along with the Washington elites who had allowed the Rust Belt to decline – were seen as having betrayed the American people.

In one notorious statement, Mexicans were broadly branded as being responsible for crime and drugs and were portrayed as the cause of poor security in American cities – “They are bringing crime; they are rapists!” In many speeches and remarks to this day, Trump draws a causal link between migration and US security problems. Since a large share of the drugs consumed in the US do in fact come from Latin America – with criminal networks and cartels often based in countries such as Mexico – there is at least superficially a certain logic to this narrative.¹³

Within the populist-nationalist MAGA discourse, the common enemy was thus clearly defined, thereby creating an “us versus them” dynamic behind which many voters could rally, including some who were not of US-born background. In this context, Mexico and Mexicans often became the central image, the shared adversary.

Cooperation instead of confrontation

In Trump’s second term, the focus of his political agenda has shifted only slightly. Even before taking office, his team announced a policy shift in the three key cross-border areas of trade, migration, and organised crime/drug trafficking, thereby interlinking them.

On his very first day in office, Trump issued a flurry of executive orders putting maximum pressure on the Mexican government, including designating the cartels as terrorist organisations and imposing immediate 30 per cent punitive tariffs on USMCA free trade partners. Just two days later, in response to Mexico’s hasty concessions – including the deployment of 10,000 National Guard troops to the border – the tariffs were suspended.¹⁴ It was a deal to Trump’s liking, a display of dominance that underscored the economic might of the US. For Mexico, such tariffs would have been devastating. Trump’s announcement that he intended to tax migrant remittances also sent Mexico’s policymakers into high alert.¹⁵ The challenge, then, is to oppose the mostly transactional President while finding other ways to accommodate him. Far more openly than any of his predecessors, Trump links different policy areas together. Although security and free trade are only partially related, Trump threatens action in one field – trade – in order to achieve his goals in another – security. For its part, Mexico must do almost everything it can to preserve free trade as such and is therefore willing to grant Trump visible wins, such as tighter controls on the US’s southern border – thereby preventing illegal crossings into the north – and carrying out high-profile raids on drug laboratories.¹⁶

However – and this is central to understanding the dynamic between Trump and Sheinbaum – the Mexican President holds leverage over several of Trump’s core domestic campaign promises. Migrants, drugs, and organised crime all come from or through Mexico. They could be stopped there – or not.

In principle, more effective security cooperation serves both sides: It weakens the drug cartels (a shared interest), minimises migration (a US interest), and safeguards national sovereignty (a Mexican interest).¹⁷ Above all, territorial integrity vis-à-vis the powerful northern neighbour is sacrosanct. President Sheinbaum can show great flexibility and accommodation towards the US because everyone in Mexico is aware of the economic dependencies, but unilateral US action on Mexican soil would be unacceptable and – for domestic political reasons – could never be tolerated.¹⁸ The complexity of the issue is well understood in Washington: With his Latino background and political base in Florida, Secretary of State Rubio is thought to have some understanding of sensitivities south of the Rio Grande, for example. During a recent visit to Mexico, Rubio repeatedly emphasised – in Spanish – the importance of respecting Mexico’s sovereignty and expressed gratitude for the country’s close cooperation in combating cross-border crime.

Trump’s designation of the cartels as terrorist organisations under US law gives him the legal option of taking military action against them.¹⁹ He set this tone deliberately at the start of his term and at the same time deployed several thousand troops to the border under the pretext of securing it. Kinetic strikes – using armed drones to hit cartel targets deep inside Mexican territory, for instance – would pose little technical difficulty for the well-equipped US armed forces. Under this constant threat, which is often accompanied by warnings of punitive tariffs, Trump has exacted more decisive action against the criminal organisations; against rampant corruption in politics, the judiciary, and the military; and against the at-times poorly controlled migration through Mexico. Ironically, this gives Sheinbaum the necessary political cover to take a tougher stance at home and to distance herself from the more complacent approach of her predecessor and political mentor, Andrés Manuel López Obrador.²⁰

Herein lies Trump’s central strategic weakness vis-à-vis Mexico: Migration, drugs, and cartel violence are closely interconnected, yet they lie largely beyond the direct control of the US.

Whenever Trump offends Mexico too sharply and cooperation slows, he runs into difficulty delivering on his promises. Within this complex field of tension, the Mexicans are well aware of this political advantage, even if they never name it openly.

Considering these dynamics, it can be said that Trump places heavy demands on Mexico and exerts great pressure. However, given the circumstances, Trump cannot act on his power-political instincts without restraint. This gives Mexico a degree of leverage to negotiate with him and to assert or safeguard its own interests vis-à-vis Washington. On several occasions, despite announced punitive tariffs, Mexico has been spared following a personal phone call from Sheinbaum.²¹

Dealing with Trump

Mexico’s President has already been admiringly described as the “Trump Whisperer”.²² This moniker may sound somewhat hyperbolic given that the two have not yet met in person. Indeed, a planned meeting on the sidelines of the G7 summit in Canada – to which Sheinbaum had been invited by host Mark Carney – did not take place due to Trump’s early departure. Nevertheless, the US President has repeatedly spoken very positively about his Mexican counterpart. As their conversations are not public, Sheinbaum’s approach cannot be studied directly, yet public statements and political measures do provide some insight into her chosen strategies.

Mexico’s response to tariff threats has been to make public gestures of cooperation (e.g. the arrest and extradition of cartel leaders and the deployment of soldiers to the shared border). These actions implicitly validate Trump’s claims, thereby allowing him to present them as political successes at home. Through such direct security cooperation, Mexico makes itself useful – even indispensable.

There are, however, certain boundaries that President Sheinbaum cannot cross, for she too has a domestic audience to satisfy. Her public insistence on Mexico’s national sovereignty and political independence draws clear boundaries with the north and incidentally gives Sheinbaum excellent approval ratings at home.²³ Mild counter-threats are an effective and occasionally employed tactic in tariff discussions, reminding Trump that Mexico could in turn impose 25 per cent duties on all US imports, thereby directly harming American firms.

Sharp rebuttals occur only when sovereignty and national integrity are challenged too aggressively. In relations with both Canada (which at the start of 2025 sought to throw Mexico “under the bus”) and the US, Sheinbaum has at times felt compelled to respond firmly. In response to accusations that Mexico bears sole responsibility for drug trafficking and violence in North America, she has said that Mexico is not responsible for pursuing criminal networks beyond its borders. The Mexican government also frequently stresses that the high demand for narcotics in the US remains a central part of the problem.

Mexico tends to go on the counter-offensive above all when it comes to its own security crisis. The bloody conflicts have long been known to be fuelled by weapons smuggled from the US. For Mexico City, this is a key but often-ignored political issue – one that has even reached the US Supreme Court.²⁴ Little is being done in the north to stem the flow of smuggled firearms, which claim around 30,000 lives in Mexico every year.²⁵

Finally, Mexico’s geographic proximity and structural ties ensure that its political presence in the US is unmatched. There are 53 consulates across the country: At regional and local levels, thousands of Foreign Ministry staff are tasked with maintaining contacts and advocating for Mexico’s interests and its people within US constituencies.

Neither Sheinbaum nor her advisers appear in any hurry to arrange a personal meeting between the two heads of state. Indeed, they remember all too well the public humiliations suffered by several other world leaders.

Conclusion

It is clear that Claudia Sheinbaum – as Mexico’s first female president – faced no easy starting position in dealing with the returning occupant of the White House. Unlike many of her counterparts, however, she seems to have found a functional, matter-of-fact way of handling him.

Despite economic dependence and a pronounced imbalance of power, Sheinbaum navigates both the national and personal dimensions of this relationship with skill while remaining fully aware of certain strategic advantages that do not need to be publicly stated. The bilateral relationship between the two countries may at times appear contradictory.

The special dynamic between these unequal neighbours – that is, between the erratic Trump and the level-headed Sheinbaum – cannot serve as a model for others, yet some conclusions can still be drawn. When dealing with Trump, the focus must lie on shared interests and on one’s own strengths: Indeed, there is little to be gained from being an antagonist. Sheinbaum is certainly not winning against Trump, but neither is she losing – and that alone is more than most of her counterparts worldwide can claim.

That said, any foreign policy analysis of Mexico must also acknowledge the country’s severe internal problems, which persist under Sheinbaum’s leadership. In recent years, Mexico has suffered striking democratic setbacks. The ruling party – MORENA – controls not only the government, but also both chambers of the national parliament as well as much of the country’s 32 federal states and – through a 2024 judicial reform – has seriously undermined the rule of law.

Judges at all administrative levels are now elected directly by the public, thereby opening the door still wider to the corruption already rife throughout the system.²⁶ Organised crime continues to control parts of the country as well as sectors of the economy and politics while terrorising the civilian population. The security situation remains tense at best, and in some regions, the state effectively no longer exercises control. Independent investigative media are met with threats and lawsuits from government circles – and the list could go on. Since Trump is not exactly known for his reverence for democracy, for his respect for the separation of powers, or for transparency, perhaps he recognises in Sheinbaum a kindred spirit of sorts.

This article reflects the state of affairs as of 24 November 2025.

– translated from German –

Maximilian Strobel is Policy Advisor for Law and Global Order at the Konrad-Adenauer-Stiftung. He previously spent two years as a research associate at the Konrad-Adenauer-Stiftung’s Mexico Office.

1. Rubio-Marquéz, Vanessa 2025: Despite Trump’s threats, Mexico is of fundamental importance to the US economy, Chatham House, 10 Feb 2025, in: https://ogy.de/da6s [30 Sep 2025]. ↩︎
2. The United States–Mexico–Canada Agreement (USMCA) is a trade agreement between these three countries. ↩︎
3. The North American Free Trade Agreement was an economic treaty binding together Canada, the US, and Mexico. It was replaced by the USMCA in 2020. ↩︎
4. In 2023, Mexico ranked twelfth worldwide with a gross domestic product (GDP) of USD 1.789 trillion, ahead of Australia, South Korea, and Spain, as well as 73rd in terms of GDP per capita, behind Georgia, the Dominican Republic, and Serbia. Worldometer: GDP by Country, in: https://ogy.de/0kqc [29 Oct 2025]; Worldometer: GDP per Capita, in: https://ogy.de/8fkd [29 Oct 2025]. ↩︎
5. Trading Economics: United States Imports by Country, in: https://ogy.de/0r24 [28 Oct 2025]. ↩︎
6. Trading Economics: Mexico Exports by Country, in: https://ogy.de/j1t6 [28 Oct 2025]. ↩︎
7. Adrienne Arsht Latin America Center 2025: Beyond the border: Your briefing on US-Mexico commerce, Atlantic Council, 31 Jan 2025, in: https://ogy.de/k6db [30 Sep 2025]. ↩︎
8. Moslimani, Mohamad / Noe-Bustamante, Luis / Shah, Sono 2023: Facts on Hispanics of Mexican origin in the United States, 2021, Pew Research Center, 16 Aug 2023, in: https://ogy.de/sy3k [28 Oct 2025]. ↩︎
9. Passel, Jeffrey S. / Krogstad, Jens Manuel 2025: U.S. Unauthorized Immigrant Population Reached a Record 14 Million in 2023, Pew Research Center, 21 Aug 2025, in: https://ogy.de/jxop [28 Oct 2025]. ↩︎
10. Spiegel 2025: Exil-Mexikaner in den USA schicken deutlich weniger Geld nach Hause, 3 Jun 2025, in: https://ogy.de/58hr [28 Oct 2025]. ↩︎
11. Steingart, Gabor 2006: America’s Middle Class Has Become Globalization’s Loser, Spiegel, 24 Oct 2006, in: https://ogy.de/7e3m [28 Oct 2025]. ↩︎
12. Hispanics are people in the US with a Spanish-speaking background or culture. Latino is a geographic term encompassing people from Latin America, including Mexico, Central and South America, and the Caribbean. The two terms are often used interchangeably. ↩︎
13. In Mexico, awareness of the problem is naturally acute after decades of a drug war that has claimed hundreds of thousands of lives. However, one might well ask what makes the global narcotics trade so lucrative: the supply or the insatiable demand in the West. ↩︎
14. Wagner, James 2025: Mexico Deploys 10,000 National Guard Members to U.S. Border: What to Know, The New York Times, 2 Feb 2025, in: https://ogy.de/fpvx [30 Sep 2025]. ↩︎
15. Käufer, Tobias 2025: Trump targets illegal migration with remittance tax plan, Deutsche Welle, 23 May 2025, in: https://ogy.de/8iel [30 Sep 2025]. ↩︎
16. The Watch 2025: Fentanyl flow drastically reduced on Mexico-U.S. border, 15 Jul 2025, in: https://ogy.de/nkuf [30 Sep 2025]. ↩︎
17. Wong, Edward 2025: U.S. and Mexico Vow to Fight Crime While Respecting Sovereignty, The New York Times, 3 Sep 2025, in: https://ogy.de/ou8t [30 Sep 2025]. ↩︎
18. Associated Press (AP) 2025: Mexican president rejects Trump’s offer of military intervention against cartels, Politico, 18 Nov 2025, in: https://ogy.de/ofzu [25 Nov 2025]. ↩︎
19. In September 2025, the US carried out at least two strikes on alleged drug smugglers off the Venezuelan coast – a clear signal to the country’s leadership. Buschschlüter, Vanessa / Rawnsley, Jessica 2025: US destroys alleged Venezuelan drug boat, killing three, BBC, 16 Sep 2025, in: https://ogy.de/cc80 [30 Sep 2025]. ↩︎
20. Mexico – for its part – has long been the stage for a bloody drug war driven primarily by conflicts among rival cartels, with the state intervening at times more, at times less. Decision-makers at all levels are entangled in these structures, and corruption remains widespread. For this reason, effective anti-corruption efforts by the new President would not necessarily be in the interest of all members of the country’s political elite. ↩︎
21. Hawkins, Ari 2025: Trump extends Mexico tariff deadline for 90 days, Politico, 31 Jul 2025, in: https://ogy.de/rkl9 [30 Sep 2025]. ↩︎
22. Sheridan, Mary Beth / Miller, Leila 2025: How Mexico’s President became the world’s leading Trump whisperer, The Washington Post, 9 Mar 2025, in: https://ogy.de/44l9 [30 Sep 2025]. ↩︎
23. AP 2025, n. 18. ↩︎
24. Kruzel, John 2025: Supreme Court spares US gun companies from Mexico’s lawsuit, Reuters, 5 Jun 2025, in: https://ogy.de/xtph [30 Sep 2025]. ↩︎
25. In this context, the following listen is recommended: Deutschlandfunk Kultur 2025: Krieg in Mexiko (1/4) – Der Weg der Waffen, ARD, 5 May 2025, in: https://ogy.de/8t5c [30 Sep 2025]. ↩︎
26. Blomeier, Hans-Hartwig / Rank, Hartmut / Campos, Juan Pablo 2025: Election of judges in Mexico. Between the promise of democracy and the concentration of power, Country Reports, Konrad-Adenauer-Stiftung, 3 Jun 2025, in: https://ogy.de/j25t [28 Oct 2025]. ↩︎