Mexico’s ability to soften the blow from tariffs is also limited because of budgetary challenges, said Kimberley Sperrfechter, an emerging markets economist at Capital Economics in London, citing a budget shortfall in 2024 that reached its highest level in decades.
One sector of Mexico’s economy that could benefit from tariffs is the tourism industry. If tariffs are imposed, the country’s currency, the peso, could weaken, Ms. Sperrfechter said, and make Mexico even more appealing to U.S. tourists, who represent the country’s largest international visitor group.
“But,” she added, “that’s unlikely to offset the hit to other sectors.”
