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How Trump’s Tariffs on Mexico Impact Forex and Crypto Traders
Apr 12, 2025
In the ever-changing world of global trade, few events have been as sudden or disruptive as the tariffs imposed on Mexico by former President Donald Trump in 2025. These tariffs sent shockwaves through the economy, and their effects are still being felt today.
What do tariffs on Mexico mean for the average trader? Who is impacted the most? If you’re looking for answers to these questions, you’ve come to the right place. This guide will explore how Trump’s tariffs 2025 on Mexico impact forex and crypto traders to prepare you for the next sudden economic shift.
Staying current with upcoming changes in tariffs and trade agreements is crucial, especially for forex and crypto traders. GoMoon's AI-powered economic calendar will help you track any news and upcoming events related to these topics so you can prepare for what’s next.
Table of Content
What Have Been The Changes To Mexico's Tariffs Since Trump Returned To Office?
What Is the Impact of Trump’s Mexico Tariffs on Forex and Crypto Markets?
What Are Tariffs and Why Is Trump Using Them in 2025?
Tariffs are government-imposed taxes on goods imported from other countries. They are usually expressed as a percentage of the product’s value. For example, a 25% tariff on $100 worth of goods means importers must pay $25 in taxes. Importers, not exporters, pay tariffs. However, importers usually pass the cost to consumers or businesses, making goods more expensive.
Types of Tariffs You Should Know
Ad Valorem Tariff
A fixed percentage of the value of the imported good (e.g., 10% of the product’s price).
Specific Tariff
Regardless of price, a set fee per unit, like $2 per item.
Compound Tariff
A mix of both.
Common Reasons for Tariffs
Protect domestic industries from foreign competition.
Generate government revenue.
Punish or pressure foreign governments over trade disputes, human rights, or geopolitical disagreements.
Correct trade imbalances (e.g., if a country exports much more than it imports from the U.S.).
Why Trump Is Using Tariffs in 2025
Trump’s 2025 trade policy reintroduces tariffs as a core economic and geopolitical leverage tool, just like during his first term — but with bolder execution. Here's how:
1. Economic Nationalism (America First 2.0)
Trump wants to bring manufacturing jobs back to America. By taxing imported goods, he makes foreign products more expensive and less competitive compared to U.S.-made items. This incentivizes companies to “buy American” or relocate factories back to the U.S. to avoid tariffs.
2. Trade Leverage Against Foreign Countries
Trump has publicly criticized countries like Mexico, China, and Vietnam for having trade surpluses with the U.S. A trade surplus means these countries export more to the U.S. than they import from it, which Trump sees as unfair. Tariffs pressure those governments into renegotiating trade deals that favor American interests.
3. Border and Immigration Policy Tie-In
Trump is connecting tariff policy to border security, especially with Mexico. For instance, he’s using tariff threats to push Mexico into stricter immigration enforcement and cooperation on asylum rules. In this way, tariffs aren’t just an economic tool — they’re being used to drive foreign policy outcomes.
4. Revenue Generation Amid Tax Reform Push
Trump is proposing new tax cuts, including eliminating taxes on tips, Social Security income, and overtime pay. These tax cuts would increase the federal deficit, so tariffs are positioned as an alternative revenue source to help balance the books without raising domestic taxes.
5. Election-Year Strategy
Tariffs are popular among specific voter bases — particularly manufacturing workers, farmers, and nationalists. By positioning himself as tough on trade, Trump aims to win over voters who feel globalization has hurt American jobs.
Related Reading
• Trump News
• Tariffs
• Trump Tax Plan 2025
• Trump Taxes
• Trump Tariffs Canada
What Have Been The Changes To Mexico's Tariffs Since Trump Returned To Office?
The Beginning of Tariffs on Mexican Goods in 2025
On January 21, 2025, President Trump reinstated a 25% tariff on most goods imported from Mexico. The move was intended to combat illegal immigration and drug trafficking from Mexico into the U.S. The initial tariff imposition continued Trump's America First strategy, positioning Mexico as an economic partner and a security concern. The tariffs pressured Mexico into stricter border control, law enforcement cooperation, and trade compliance.
A Quick Tariff Exemption for Compliant Goods
In response to diplomatic discussions with Mexican President Claudia Sheinbaum, the Trump administration quickly exempted USMCA-compliant goods from the new tariffs. This exemption was critical for a few reasons.
First, it helped maintain supply chain stability for U.S. companies reliant on Mexican inputs. Second, it preserved diplomatic ties with Mexico despite harsh rhetoric. Finally, the exemption was part of a broader bilateral cooperation agreement focused on reducing fentanyl trafficking into the U.S. and tackling illegal firearms flow southward into Mexico.
Blanket Tariffs on Product Classes Impacting Mexico
Even with general exemptions, Trump enforced a blanket 25% tariff on specific product classes that include Mexico: steel and aluminum, and automobiles and auto parts. These tariffs were reinstated across the board, targeting countries like Mexico, Canada, and China. Automobiles and auto parts are significant exports for Mexico and key to its manufacturing sector.
The tariffs impacted cross-border production between U.S. carmakers, Mexican assembly plants, and auto and metal commodities market investors. Despite USMCA compliance, Mexico's automotive sector was hit hard, leading to price hikes in U.S. dealerships and reduced Mexican export volumes.
New Tariff Threats Emerge
On April 11, 2025, Trump warned that new tariffs would be enforced if Mexico failed to comply with the 1944 U.S.-Mexico Water Treaty. The core issue involves Mexico’s alleged failure to deliver agreed volumes of water from the Rio Grande Basin. Mexico’s response, led by President Sheinbaum, cited severe drought conditions, reducing the water supply.
Sheinbaum also noted a willingness to renegotiate the treaty based on updated environmental data. This dispute marks a growing risk area for traders, especially those exposed to agricultural commodities, water-related infrastructure, and cross-border logistics stocks.
GoMoon: The Future of Economic Event Trading
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
Related Reading
• Canada Tariffs
• Canadian Tariffs On US Goods Prior To 2025
• Reciprocal Tariffs
• Is Trump Getting Rid Of Income Tax
• Trump Economic Plan
• Mexico Tariffs
What Is the Impact of Trump’s Mexico Tariffs on Forex and Crypto Markets?
How Trump’s Tariff Policies Affect Currency Strength & Volatility
Trump’s tariffs on Mexico impact the forex market by creating instability and altering currency values, especially between the US Dollar and Mexican Peso. As the US dollar strengthens, the Mexican peso loses value, creating a volatile trading environment for USD/MXN, susceptible to tariff news and announcements.
USD/MXN Becomes a Volatility Hotspot
Tariff announcements or threats from Trump typically cause the Mexican Peso to weaken rapidly against the U.S. Dollar. This is driven by fears of slowed Mexican exports, which reduce incoming USD flow. There are also concerns about reduced investor confidence in Mexico’s manufacturing and supply chain ecosystem. Conversely, the USD strengthens as a global haven in these scenarios, further deepening the USD/MXN imbalance.
Emerging Market Sell-Off Risk
Traders tend to withdraw from emerging market currencies (MXN, BRL, COP, etc.) during geopolitical instability. This often leads to broad EM currency depreciation, increasing the risk in Latin America-focused forex strategies.
Interest Rate Implications
The Bank of Mexico may raise rates to defend the peso if tariffs trigger sharp declines. This can create carry trade opportunities for advanced traders but also raise Mexico's inflation risks.
How Tariffs Impact the Crypto Market
The crypto market reacts differently from forex but still feels the weight of Trump’s trade decisions through macro trends and investor psychology.
Bitcoin and Stablecoins as Hedging Tools
Some traders rotate into BTC or stablecoins during tariff-driven uncertainty to hedge against fiat currency devaluation. Mexican and Latin American investors often seek protection in USDT or USDC when they fear their local currencies might drop sharply. If Trump’s rhetoric escalates into sustained economic pressure, on-chain activity in cross-border crypto payments (e.g., USDT transfers between Mexico and the U.S.) typically spikes.
Market Sentiment Swings
Trump’s policies add a layer of unpredictability that crypto traders love — or fear. As traders speculate on macro trends and safe-haven demand, sudden tariff threats often trigger short-term BTC/ETH volatility. Tariff-related news may shift narrative momentum from DeFi/gaming tokens to “store of value” assets like Bitcoin.
U.S. Regulatory Uncertainty Trickles In
Trump's aggressive use of tariffs brings regulatory uncertainty to crypto, especially around cross-border use cases. Traders may start pricing risk premiums for crypto projects that rely on U.S.-Mexico commerce, such as remittance tokens or supply chain coins.
Real-World Trading Example
In early 2025, following Trump's tariff threat tied to the water treaty, USD/MXN jumped 2.3% in a single day — an unusually sharp move for that pair. Meanwhile, BTC trading volumes on Mexican exchanges rose by over 18%, signaling growing interest in crypto as a hedge.
How Traders Can Strategically Trade Trump’s Mexico Tariffs
How to Profit from Trump Tariffs on Mexico
A step-by-step system for trading profitably when Trump announces, escalates, or modifies tariffs against Mexico — especially for those active in forex and crypto.
Step-by-Step Guide for Forex Traders (e.g., USD/MXN, CAD/MXN)
1. Monitor Political Announcements in Real-Time
Use tools like:
GoMoon.ai – Set up real-time alerts with keywords like “Mexico tariffs,” “Trump,” “Sheinbaum,” or “water treaty.”
TweetDeck or Newsnow – Track verified journalist accounts and financial desks that break Trump-related policy changes.
2. Focus on USD/MXN Price Action
Trump’s aggressive announcements often weaken the peso, causing USD/MXN to surge. If Trump offers relief or exemptions (e.g., for USMCA-compliant goods), it may strengthen MXN, especially intraday. Before entering positions, look for key support/resistance levels on the 4H or daily charts.
3. Time Entries Around Press Events
Trump’s patterns are predictable during press conferences or Twitter/X /X posts (if reactivated). Use this timing to your advantage by waiting for the initial spike, avoiding the first wave of emotional volume, and entering on the retracement to key levels for better risk/reward.
4. Trade EM Currency Baskets
During broader tariff escalations, diversify with correlated trades like: short MXN, long USD; short BRL or COP if Latin America-wide tensions rise. Set conservative stop-losses — these pairs are volatile under Trump.
Step-by-Step Guide for Crypto Traders
1. Track Capital Flight from Fiat to Crypto
Use on-chain data tools (e.g., Glassnode, Arkham, Dune Analytics) to monitor: USDT/USDC inflows on Mexican exchanges (Bitso, Volabit); sudden activity on BTC-LN remittance apps (like Strike); spikes in stablecoin volumes during tariff news hint at crypto becoming a hedge flow.
2. Position Around Narrative Shifts
If regulation fears grow, Trump's instability tends to drive interest in BTC (digital gold narrative), stablecoins (USD proxies), and privacy coins. Avoid overexposure to LatAm-based altcoins or DeFi tokens that are vulnerable to regulatory changes.
3. Trade the “News Sentiment Volatility”
When a Trump tariff threat drops, short-term BTC/ETH becomes volatile. Enter scalp trades or short-term swing setups based on fear sentiment. Use sentiment scores from GoMoon.ai or Santiment to confirm if the market mood is bearish or neutral.
4. Exit Quickly or Reassess Post-Tariff Clarity
Don’t marry your trade. Markets often reverse fast once the tariff is clarified or negotiated, especially in crypto. Constantly rebalance or tighten stops once the news dust settles.
Sample Setup Using GoMoon.ai (For Both Forex and Crypto)
Trigger alert
“Trump announces Mexico tariff” → USD/MXN alert hits.
Sentiment index drops
Indicating bearish pressure on MXN.
Chart review
USD/MXN breaks the previous high from the last Trump announcement.
Trade idea
Long USD/MXN or move into USDT if crypto local sentiment weakens.
Risk management
Place a stop-loss below prior resistance, which has turned support.
Use Our AI-powered Economic Calendar Tool for Free Today
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
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