Trump vows immediate doubling of Mexico tariffs unless caravans stop

The threat and the market snapback

Trump said Thursday that if Mexico does not stop caravans he claims are forming, tariffs on Mexico will be doubled right away. His post read, "MEXICO MUST STOP THEM, NOW, and if they do not do so, the Tariffs on Mexico will be IMMEDIATELY DOUBLED." He did not set a deadline. It is also uncertain what legal basis he could use after a Supreme Court ruling earlier this year limited his tariff authority. The peso weakened and touched session lows following his message.

Mexico's stance and the size of the flows

President Claudia Sheinbaum said that in recent days two migrant caravans have assembled, yet she insisted they will be prevented from reaching the US. "Since President Trump took office, no migrant caravan has reached the northern border," she said Thursday, adding, "We always inform the people in these caravans that if their goal is to reach the United States, they won't be able to do so." She said Mexico offers opportunities to those who want to remain and helps those who want to return home, and mentioned a possible meeting with Trump at next month's Group of 20 summit in South Florida. While Trump warned of "Huge CARAVANS," a Reuters dispatch on Wednesday said a small group of migrants was traveling through Mexico, aiming to enter the US after the midterm elections, in which Republicans suffered massive losses.

Politics, trade talks, and what is next

Trump also wrote, "I WAS NOT ON THE BALLOT- the INVASION of our Country is taking place again," and said, "MEXICO, THE GOVERNOR OF TEXAS, THE VERY LIBERAL NEW GOVERNOR OF TEXAS, OUR GREAT BORDER PATROL, & ICE, HAVE BEEN SO INFORMED." Polls showed that mass deportations and aggressive federal tactics helped erode support for his hard line on immigration. He indicated the strategy would continue by appointing Stephen Miller - described as the architect of his anti immigration policies - as White House chief of staff. In last week's election, Republicans relinquished control of both chambers of Congress, as well as key state contests. In Texas, Democratic Governor-elect Gina Hinojosa beat Greg Abbott, the Republican who had served as governor for many years.

He frequently dangled tariff increases as leverage over trading partners, at times following through and at other times pulling back. His administration is negotiating with Mexico after he declined to extend the USMCA this summer. He negotiated that pact in his first term but has recently criticized it as unnecessary.

Policy headlines can shift market sentiment, so investors seek better tools to respond. We're hosting our first ever investor livestream on 11/17 to show you how to use ChatGPT and Claude to invest like a pro, hosted by Briefs Finance CEO Jaspreet Singh. Save your seat.

Negotiations were progressing earlier this fall, but they stalled over steel and aluminum tariffs, according to people familiar with the talks. Discussions cooled after Commerce Secretary Howard Lutnick tried to take control of the negotiations and objected to Mexican officials' requests for lower metals tariffs, those people said.

What this means for your portfolio

In plain English: tariff threats tend to hit currency and trade exposed assets fast, which tracks with the peso's slide. With an unresolved legal path for new levies and talks bogged down over metals, cross border supply chain names and Mexico linked equities could stay choppy heading into the G20 in South Florida.

Smart investors welcome practical ways to gain an informational edge in changing markets. On 11/17, our CEO Jaspreet Singh goes live for our first ever investor livestream on how to use ChatGPT and Claude to invest like a pro. Register to join him.