The Mexican peso lost ground against the dollar on March 3, 2025, closing at approximately 20.67 pesos per dollar after a depreciation of 0.7%, which equates to 14 cents. The latest exchange rate ranked the peso among the weakest currencies against the U.S. dollar during the trading day, with the Taiwanese dollar down 0.32%, the Russian ruble by 0.24%, and the Canadian dollar by 0.21%, among others. The dollar was quoted at 21.20 pesos for sale at Banamex branches, representing a 0.81% increase or 17 cents from the previous Friday’s close.
This depreciation follows former President Donald Trump’s confirmation during a press conference of the implementation of general tariffs set to take effect on March 4. The tariffs include 25% on imports from Mexico and Canada and 10% on imports from China. Experts cite this move as indicative of market apprehension, with uncertainties swirling about potential announcements or decisions before these tariffs come to fruition.
According to Gabriela Siller, director of economic analysis at Grupo Financiero Base, the expected tariffs have provoked some trepidation among investors. She explained, “Should the tariffs proceed without additional announcements, the wholesale exchange rate may first adjust to 21.00 pesos per dollar and later face resistance at 21.50.”
The broader market felt the impact of these developments. On March 3, the Mexican Stock Exchange saw losses too. The Índice de Precios y Cotizaciones (IPC) fell 0.47%, continuing its downward trend with significant losses across several key companies such as Cemex, which dropped by 2.7%, and Qualitas, down 7.3%.
On the morning of March 4, the IPC opened with another decline of 0.71%, tracking similar movements observed on Wall Street, where the S&P 500, Nasdaq, and Dow Jones all registered losses after Trump's tariff announcement. The S&P dipped 1.00%, reaching 5,791.22 units, and the Nasdaq fell by 1.13%, landing at 18,142.03 points. The Dow Jones retreated by 1.06%, measuring 42,732.14 units. These figures reflect global market instability, pinging off the heightened tensions stirred by trade tariffs.
Later, President Claudia Sheinbaum of Mexico stated during her morning briefing on March 3, the day before tariffs were set to officially launch, “We are prepared and we have plans” to address the situation, but affirmed the trade negotiations fundamentally rest with President Trump’s administration. “What we need is calm and patient action.”
By March 4, Sheinbaum reiterated the government's plans related to the tariffs and announced they would officially respond by March 9 if necessary. Confirming upcoming communication with the U.S. president, she was set to speak with Trump shortly.
The stock market reactions underscored apprehension over the prospect of trade escalations. Sheinbaum’s administration continues to carefully strategize on dealing with the tariffs. After Trump's announcement about imposing tariffs of 25% on both Mexico and Canada—using earlier discussions about border issues as justification—investors expressed urgent concern about future impacts.
Market sentiment was also impacted across the globe. European markets recorded declines, with the DAX index dropping 2.3%, the CAC 40 losing 1.4%, and the FTSE 100 down 0.5%. Meanwhile, Asian markets registered moderate losses, highlighted by the Tokyo Nikkei's 1.2% decline, showing the spread of the negative sentiment encouraged by uncertainty over trade policies and economic performance.
On the corporate front, retailers were already signaling likely price rises due to these tariffs. Key players like Target and Best Buy warned customers about potential price increases on consumer electronics and other imported goods. The specter of raised prices loomed, threatening to directly impact the American consumer and their spending habits, potentially leading to economic slowdown.
With these tariffs soon materializing, Canada also positioned itself to retaliate, announcing similar tariffs against the United States, with Prime Minister Justin Trudeau calling the U.S. tariffs “unjustified.”
Analysts warned of the ramifications of the tariffs on consumer prices and employment, stating, “Americans will likely see higher prices on everyday goods.” A ripple effect could extend from the automotive to technology sectors as businesses brace for retaliatory actions amid unaddressed concerns.
Underlining this chaotic financial backdrop, Trump’s administration continues to evaluate its stance, with vested interests keeping fingers crossed for constructive negotiations. Observers remain cautious, echoing caution as uncertainty looms over future economic pathways. The tariffs, set to commence alongside Canada’s impending counters, have solidified fears of trade wars and stoked anxieties about sustaining the economic momentum necessary for growth.
With markets across the globe reacting to looming trade tensions, the economic climate is marked by uncertainty, route changes, and possible volatility as both Mexico and Canada navigate the potential fallout from these U.S. tariff increases.