Mexico, EU Announce Revamped Trade Agreement amid Trump's Tariff Threats

Mexico City, Mexico – Days before the inauguration of US President-elect Donald Trump, Mexico and the European Union (EU) unveiled an updated trade agreement. This agreement aims to significantly boost bilateral trade and investment amidst Trump's threats to impose tariffs on Mexican imports.

The Global Trade Agreement between Mexico and the 27-nation bloc will reduce Mexican tariffs on agri-food imports from Europe. It will also remove barriers to European investments in Mexico and facilitate Mexican exports of raw materials, including fluorspar, antimony, copper, zinc, and lead.

According to the EU, the revamped agreement, originally established 25 years ago, also seeks to foster "strategic cooperation on key geopolitical issues."

"Our upgraded agreement signifies the EU and Mexico's commitment to free trade and an open global economy," said Kaja Kallas, Vice President of the European Commission.

The announcement comes amidst Trump's threats to impose tariffs of up to 25% on all Mexican imports, which could adversely impact both economies. While the updated EU agreement may mitigate some potential losses from disrupted US-Mexico trade, trade between Mexico and the EU remains a fraction of Mexico's annual trade with the United States.

In 2023, US-Mexico trade exceeded $800 billion, while Mexico's trade with the EU reached $84 billion, as per the EU.

The Mexican Economy Ministry has yet to comment on the updated agreement with the EU.