(Bloomberg) -- It took Mexican President Claudia Sheinbaum a single phone call to get Donald Trump to back off — at least temporarily — from his threat of tariffs.
Canada’s Justin Trudeau needed two.
It’s a testament to Sheinbaum’s ability to read the US president even though she’s been her country’s leader for much less time than Prime Minister Trudeau. Unlike the Canadian, her reaction to Trump’s tariff announcement wasn’t a threat to unleash a litany of counter measures. She just kept insisting on cooperation.
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Her triumph was obvious on Monday, when she took the stage for her daily press address grinning. “You’ve seen the tweet, right?” she asked the crowd of reporters. Sheinbaum had announced in a post on X that, after a phone call that morning, Trump had agreed to push back the start of 25% tariffs against Mexico by a month.
In exchange, Mexico would deploy 10,000 National Guard members to the nations’ shared border to stop the flow of undocumented migrants and fentanyl, by all accounts a minuscule price to pay.
The Mexican president’s quick success raised the domestic heat in Canada and set a high bar for Trudeau to strike a similar deal in such a critical diplomatic moment. It also put on display how the two leaders are operating from vastly different positions of power. Sheinbaum — just four months into her six-year term — has a united government behind her, with a supermajority in Congress. Trudeau, meanwhile, is on his way out. Facing deep fractures in his ruling Liberal party, he recently resigned and will only remain prime minister until March, when a new leader steps in.
Hours later on Monday afternoon, Trudeau secured a tariff delay. He said Canada would appoint a “fentanyl czar” and start a joint task force with the US to address drug-trafficking and money laundering, plus beef up border security.
Sheinbaum has “deftly managed President Trump,” said Pamela Starr, an international relations professor at the University of Southern California. “She’s really been going out of her way to be cooperative” when it comes to his asks.
The peso and Canada’s dollar rebounded against the US dollar on Monday. The tariff delays also waylaid concerns of businesses, some of whom had been rushing to get their goods across the border.
Still, neither Sheinbaum or Trudeau can declare a total victory.
“Tariffs will remain like Schrodinger’s cat, dead and alive at the same time. We believe the endgame is a USMCA renegotiation, to get a USMCA 2.0,” said Carlos Capistran, chief Canada and Mexico economist at Bank of America. “That is when the threat of tariffs really end.”
Public Spectacle
Since Trump first formally threatened tariffs in November, just a couple of weeks after his election, Sheinbaum has maintained that the two could find a way to work together.
She announced a plan to build reception centers on the border for the millions of deportees he promised to send. Her government publicized drug seizures and sent the top public security official to the dangerous state of Sinaloa. She also said that North America could team up against China.
But it wasn’t clear exactly what more Mexico could offer Trump after he signed his executive orders for 25% tariffs against Mexico and Canada on Saturday. Still, Sheinbaum signaled that there was still hope. “Let’s wait for President Trump’s response to our proposal,” she said in a video posted to X on Sunday.
It was only when she took the microphone on Monday, despite it being a holiday in Mexico, that it became clear how thrilled she was. “We reached a good agreement today. There is a relationship of respect,” she said.
It was also a personal win for Sheinbaum, who had faced doubts about whether she — as a former mayor of Mexico City who had just taken office, and a woman — was the right person to challenge a volatile president.
It’s likely that she has encountered machistas “her whole life and knows how to deal with them,” Starr said. “She probably appealed to Trump’s ego and she’s certainly letting him claim victory” on the fall in migration.
The call began in Spanish with a translator, as tends to be done by protocol, but about half of the conversation happened directly in English, which allowed Sheinbaum to establish rapport directly with Trump, according to a person with knowledge of the matter.
The neighboring nations will have working groups on the issues of trade, migration and security, she said. She would continue to speak with Trump about Mexico’s public health campaign against fentanyl.
She also clinched another win: “For the first time, the government of the United States says we will work together to avoid high-caliber weapons from entering Mexico,” she said, referring to how cartels acquire many of their weapons illegally from the US.
But still, agreeing to send Mexico’s National Guard to the border was more of a show than any of the other measures Sheinbaum had already taken before the Monday call.
“This is an agreement that they could have reached behind closed doors. But Trump likes spectacles, and he needed to make this mess in order to reach the same agreement. For Trump, it’s a media victory,” said Alejandro Schtulmann, president of the consulting firm Emerging Markets Political Risk Analysis. “Sheinbaum’s response was good, measured, and serious.”
Trudeau’s Troubles
Sheinbaum’s tactics aside, there are stark differences in Canadian politics that made it more challenging for Trudeau to secure the tariff delay as fast as Mexico.
Trudeau is leaving office in March, ahead of a Canadian election later this year after a nearly decade in power. There’s also significant discontent among his constituents. Persistent inflation and falling GDP per capita have left many Canadians feeling poorer. They also bristle at Trump’s repeated desire to make Canada a 51st state of the US, imperialist rhetoric he has not used about Mexico.
Just 22% approved of Trudeau, according to a December poll from the Angus Reid Institute. Sheinbaum, meanwhile, currently boasts an approval rating of about 75%.
Trump has previously gone “on and on about how popular” Sheinbaum’s predecessor, former Mexico President Andres Manuel Lopez Obrador, was, said Starr. That “suggests that that carries weight with Trump, and makes her look strong.”
Plus, Trudeau’s decision to fly to Mar-a-Lago while Sheinbaum stayed away may have made him look weak in Trump’s eyes, she said.
Not Out of the Woods
Some spectators never believed that Trump would actually follow through with tariffs on Mexico or Canada in the first place, but the threat had scared investors and posed a grave risk for exporters.
Early Monday, before Sheinbaum announced that Trump agreed to pause tariffs, Finance Minister Rogelio Ramirez de la O held a call with investors in which he attempted to assuage concerns. He said the nation had enough international reserves to withstand the potential blow to exports.
US multinationals with economic interests in Mexico, including UPS, Amazon and Constellation Brands, were expected to meet with Mexico’s Deputy Economy Minister for Trade on Monday evening as the firms and the government seek to work together to avoid levies.
For Sheinbaum, “the crisis seems averted for now, but definitely Mexico is not out of the woods completely,” said Marco Oviedo, a strategist at XP Investimentos. “The threat is still there. We need to wait if the results can be delivered in a month as it was agreed.”
Mexico’s auto industry, for instance, will likely stockpile imports over the coming month to get ahead of potential tariffs, according to Guillermo Rosales, president of the Mexican Association of Automotive Distributors, or AMDA.
The delay means “less risk of facing a generalized tariff,” he said. “However, uncertainty persists and that affects the Mexican economy.”
--With assistance from Amy Stillman, Michael O'Boyle, Jenny Leonard and Eric Martin.
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