Mexican President Simbaum said on Wednesday that if US President-elect Trump implements his proposed 25% comprehensive tariff, Mexico will take retaliatory measures. Her administration warned that the move could cause 0.4 million US jobs to disappear and push up prices for American consumers.

Simbaum said at a press conference that “if the US imposes tariffs, Mexico will also raise tariffs,” which is her clearest indication so far that the country is preparing to take retaliatory trade measures against its largest trading partner.

Speaking with Simbaum, Mexico's Minister of Economy Marcelo Ebrard (Marcelo Ebrard) called for more regional cooperation and integration rather than starting a retaliatory import tax war. “This is tantamount to self-destructing the Great Wall,” Ebrard commented on Trump's proposed tariffs, which appear to be in violation of the USMCA trade agreement between the US, Mexico, and Canada.

Ebrard warned that these tariffs will cause the loss of a large number of jobs in the US, slow economic growth, and damage American companies that produce in Mexico because the taxes they pay have actually doubled. “This has had a huge impact on the company,” he said.

Ebrard added that the proposed tariffs would hit the automotive industry's top cross-border exporters particularly Ford (F.N), General Motors (GM.N), and Strantis (STLAM.MI).

Ebrard pointed out that 88% of the pickups sold in the US are made in Mexico, and the price of these vehicles will rise. This type of vehicle is very popular in rural America, where the vast majority voted for Trump.

“Our estimate is that the average price of these vehicles will rise by $3,000,” Ebrard said.

Simbaum said on social media platform X late Wednesday that in Mandarin, the two discussed “strengthening cooperation on security issues” with Trump and called the conversation “excellent.”

Trump has said these tariffs will remain in effect until drugs — particularly fentanyl — and immigration into the US are controlled.

Simbaum added that the migrant caravans are no longer arriving at the U.S.-Mexico border “because they were dealt with in Mexico.”

Many analysts believe that Trump's tariff threat is more of a negotiation strategy than a trade policy.

David Kohl (David Kohl), chief economist at Julius Baer (Julius Baer), said: “The lack of a clear link between this threat and trade-related issues indicates that Trump plans to use tariffs as a negotiation strategy to achieve goals that have little to do with trade.”

Mexico's automotive industry is the country's most important manufacturing sector and exports mainly to the US. It accounts for almost 25% of all automobile production in North America.

Barclays analysts say they estimate the proposed tariffs “could completely wipe out all profits of Detroit's top three automakers.”

“While the market generally understood that Trump's 25% comprehensive tariff on any vehicle or component from Mexico or Canada could be disruptive, investors underestimated the extent of the potential damage,” they wrote in a Tuesday report.

Katia Goya (Katia Goya), director of international economics at Grupo Financiero Banorte, said that the US, Mexico, and Canada are likely to seek a complete renegotiation of the agreement rather than simply continuing the current form.

“The trade conflict situation means that the US economy will decline, unemployment will rise, and inflation will increase,” Goya said.

Ebrard said that in the first nine months of this year, USMCA trade volume reached 1.78 trillion US dollars. “Tariffs will cause division and division. Mexico does not want conflict and division, but rather wants to build a stronger region.”