Mexican Peso Drops as Trump Tariff Deadline Nears
The Mexican peso lost ground after U.S. President Donald Trump confirmed that tariffs on Mexico and Canada will take effect starting Tuesday.
On Monday, the peso depreciated against the dollar, with the exchange rate closing at 20.7176 pesos per dollar, compared to 20.5782 pesos on Friday, according to official data from the Bank of Mexico (Banxico). This represents a loss of 13.94 cents, or 0.68%.
During the session, the dollar fluctuated between a high of 20.7471 and a low of 20.3749. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, fell 0.97% to 106.57 points.
Countdown to Tariffs
Trump stated today that there was no chance Mexico or Canada could prevent the 25% tariffs from taking effect tomorrow. These remarks rattled markets, which had been holding onto hope for a last-minute delay.
Following the news, the peso dropped sharply, although some relief came after Trump announced plans to speak with President Claudia Sheinbaum, slightly easing pressure on the exchange rate.
Additionally, Trump confirmed that reciprocal tariffs on agricultural products would take effect on April 2, and that existing 10% tariffs on China would be doubled to 20%, further fueling trade tensions.
Tariff Impact and Response
U.S. Commerce Secretary Howard Lutnick stated Sunday that tariffs on Mexican and Canadian goods would indeed take effect Tuesday, though Trump was still deciding whether to keep them at 25%.
President Claudia Sheinbaum said Mexico would wait for Trump’s final decision but assured that her administration has a plan to respond if the tariffs are enforced.
In an effort to prevent the tariffs, Mexico has stepped up security cooperation, extraditing several major cartel leaders to the U.S. On the trade front, Mexico proposed aligning its tariffs on China with those of the U.S., signaling support for Trump’s strategy.
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