Mexican President Claudia Sheinbaum said on Wednesday that Mexico would retaliate if U.S. President-elect Donald Trump followed through with his proposed 25% across-the-board tariff, a move her government warned could kill 400,000 U.S. jobs and drive up prices for U.S. consumers.

“If there are U.S. tariffs, Mexico would also raise tariffs,” Sheinbaum said during a news conference, in her clearest statement yet that the country was preparing possible retaliatory trade measures against its top trade partner.

Mexican Economy Minister Marcelo Ebrard, speaking alongside Sheinbaum, called for more regional cooperation and integration instead of a war of retaliatory import taxes.

“It’s a shot in the foot,” Ebrard said of Trump’s proposed tariffs, which appear to violate the USMCA trade deal between Mexico, Canada and the U.S.

Ebrard warned the tariffs would lead to massive U.S. job losses, lower growth, and hit U.S. companies producing in Mexico by effectively doubling the taxes they paid. “The impact on companies is huge,” he said.

The proposed tariffs would hit the automotive sector’s top cross-border exporters especially hard, Ebrard added, namely Ford, General Motors and Stellantis.

Mexico’s automotive industry is the country’s most important manufacturing sector, exporting predominantly to the United States. It represents nearly 25% of all North American vehicle production.

Analysts at Barclays said they estimate the proposed tariffs “could wipe out effectively all profits” from the Detroit Three automakers.

Gas prices

Canada is also looking at a coordinated response with the federal government and the premiers of the 10 provinces agreeing to work in a united way against a threat by Trump, Finance Minister Chrystia Freeland said Wednesday.

One area affected by the proposed tariffs is Canada’s oil sector.

Even as record oil output has made the U.S. the world’s largest producer in recent years, more than a fifth of the oil processed by U.S. refiners is imported from Canada.

In the landlocked U.S. Midwest, where refineries process 70% of the more than 4 million barrels per day of Canadian crude imports, consumers could see pump prices jump by 30 cents per gallon or more, or about 10%, based on current prices, GasBuddy analyst Patrick De Haan said.

Migration and the border

Sheinbaum and Trump spoke by phone later on Wednesday, the Mexican president said on social media platform X, adding the two discussed “strengthening collaboration on security issues” and that the conversation was “excellent.”

In a post on his Truth Social platform, Trump said Sheinbaum “agreed to stop migration through Mexico, and into the United States, effectively closing our Southern Border.” He described the conversation as “very productive.”

Sheinbaum’s office did not immediately respond to a request for comment from Reuters.

Trump has previously said the tariffs would remain in effect until the flow of drugs — particularly fentanyl — and migrants into the U.S. was controlled.

Sheinbaum added migrant caravans are no longer arriving at the U.S.-Mexico border “because they are attended to” in Mexico.

A caravan of several thousand migrants had been heading through southern Mexico but numbers have dwindled in recent days.