President Donald Trump has mooted ending trade with countries where Washington has big trade deficits, putting Mexico especially in the spotlight despite its key role in North American supply chains.
At an Oval Office news conference on Sept. 4, Trump said the U.S. would benefit from reducing its dependence on international trade. He suggested Washington could simply stop trading with countries with which it runs big deficits.
“We can do tremendous good for ourselves by simply not trading with countries,” Trump said.
Trump singled out Mexico from other countries. The United States’ southern neighbor is one of its biggest trading partners, and a vital cog in the automotive, manufacturing and agricultural supply chains across North America.
The United States “loses” about $195 billion a year in trade with Mexico and Trump questioned what Mexico provides that the U.S. actually needs.
“I don’t have anything that we have to have from Mexico if I don’t trade with Mexico,” Trump said, listing hot tamales and tomatoes as examples. The United States has oil and “everything” it needs, he added.
Trump pointed out that despite the tough language, he maintains a friendly relationship with Mexican President Claudia Sheinbaum.
“I don’t want to do that because we’re getting along very well with the president,” Trump said. “We like the president, we like her a lot.
The comments come as the administration has been taking a tougher stance on the U.S. trade balance and international economic relationships.
Mr Trump made similar arguments about Canada and the European Union. The US could wipe out its trade deficits with those markets by simply not trading with them, he said. Trump has said the United States “loses” some $200 billion a year with the European Union and that ending trade with Canada could save $60 billion to $90 billion a year.
The comments also came as Trump continued to put pressure on the Federal Reserve to cut interest rates.
Trump threatened on Friday to cut trading with some countries where the United States has trade deficits if the Federal Reserve does not cut rates, Reuters reported.
But the sheer size of the Mexico relationship means any major disruption could be felt by businesses and consumers on both sides of the border.
The United States had a $197 billion trade deficit in goods with Mexico in 2025. Meanwhile, Mexico remains a key supplier of vehicles, machinery, electronics and agricultural goods to U.S. businesses and consumers.
Why it matters: The numbers underscore the tension between Trump’s wish to cut trade deficits and the fact that American companies and consumers are deeply reliant on Mexican-made products and parts. Thus, any significant reduction in bilateral trade could have implications well beyond the headline trade balance.
