The Mexican peso appreciated on March 14, 2025, closing at 19.92 per dollar, continuing its upward trend even amid proposed tariffs from U.S. President Donald Trump set to take effect on April 2. The peso commenced the session appreciating 0.63% or 12.6 centavos, trading around 19.96 pesos per dollar, with exchange rates reaching a high of 20.1217 and a low of 19.9458, levels not seen since November 8, 2024. According to Gabriela Siller Pagaza, Professor of Economics at Tecnolgico de Monterrey, this movement reflects improved investor sentiment against the backdrop of tariff worries.
Edgar Amador Zamora, Mexico's Secretary of Finance, dismissed concerns over potential tariff wars with the U.S., stating, "I believe there will be no tariff war; we have a very solid trade framework and stable fiscal policy, which will insulate us from volatility." This optimistic outlook contrasts sharply with sentiments expressed earlier this month when tariffs imposed by Trump led to significant depreciation of the peso.
On March 4, 2025, with the introduction of these tariffs, the peso plunged, opening the day at 20.93 per dollar and nearing the 21 unit mark, provoking anxiety among businesses and consumers alike as President Claudia Sheinbaum responded to the fallout.
The upcoming reciprocal tariffs, effective April 2, 2025, will mirror U.S. duties, requiring equal tariffs on imports from each country. This complicated trade web has left investors cautious yet hopeful, with recent enhancements to U.S.-Mexico cooperation stoking optimism for more amicable negotiations.
Meanwhile, Canada began applying new tariffs against certain U.S. products on March 13, 2025. These 25% duties on goods including computers, sports items, and metallic products affect imports exceeding 29 billion Canadian dollars (about 18 billion U.S. dollars). Canadian Finance Minister Dominic LeBlanc declared these actions as retaliation against the "unjustified and unreasonable" tariffs imposed by the U.S. on Canadian steel and aluminum.
Mark Carney, who is set to become Canada’s next Prime Minister, highlighted willingness to communicate directly with Trump and took a strong stance against the U.S. President’s assertions, stating, "The Americans want our resources, our land, our water; Canada will never be part of the United States." Carney, known for his capacity to handle international economic crises, brings extensive experience as he prepares his government for the challenges posed by the U.S..
Pundits have noted Carney's unusual path—he will be the first Canadian Prime Minister without prior political experience. Recognized for overseeing significant financial infrastructure changes, he served as the head of both the Bank of Canada and the Bank of England. This unique background offers Carney insights as he faces potential fallout from Trump's trade policies.
Despite his lack of political experience, Carney clinched victory over Justin Trudeau's successor, indicating he may be capable of negotiating with Trump effectively. He remarked, "I know how to manage crises, and in situations like this, you need experience and negotiation skills."
Political analysts taking Carney's meteoric rise to leadership have also highlighted his financial background, which has drawn scrutiny from Conservative rivals accusing him of dishonesty concerning the company Brookfield Asset Management's relocation to New York.
Meanwhile, the peso's recent performance reflects broader market trends with the exchange rate below 20 units for the first time this year. Analysts reported the dollar weakened around 19.89 pesos on March 14, representing 0.97% less than 20.09 pesos the day before, leading to optimism surrounding Mexico’s financial climate.
Over the past week, the dollar depreciated approximately 1.78%. Overall, experts foresee continued fluctuations driven by both domestic policies and international tensions, as potential tariff increases loom large.
Further complicational factors were suggested by market analysts indicating fears of trade wars affecting U.S. growth could lead to stronger support for the peso as investors gained greater risk appetite.
It should also be noted the rise of the peso coincided with the fall of the dollar index, which dropped around -0.14% to approximately 103.68 points. If sustained, this downward trend could favor weightier currency exchange as the peso aims for continued gains amid uncertainties.
Trade tensions remain palpably high as discussions of potential tariff hikes proliferate and each country's financial soundness fluctuates. While the atmosphere remains tense, the current movements of the peso suggest resilience and adapting to the shifting economic tide.
Overall, the outcome of upcoming discussions both domestically and on the international stage will significantly influence the future of the peso and its position as it navigates through a complex global economic environment. Mexico's leadership is tasked with steering the country through these turbulent waters as uncertainties loom on all fronts, with significant attention now focused on the outcomes of tariffs and trade discussions slated for the near future.