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How Do Firms Adjust Prices in Response to Tariffs? Evidence From Mexico

Summary by voxdev.org
Evidence on the impact of NAFTA in Mexico shows that Mexican consumers benefited through lower prices, while Mexican producers benefited from larger profit margins due to lower input prices and higher markups.
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BBVA Research has predicted a contraction in Mexico's GDP of 0.4% in 2025 due to the uncertainty generated by U.S. tariffs, although it also expects growth to recover with an increase of 1.2% in 2026.

MADRID, 11 (EUROPA PRESS) BBVA Research has predicted a contraction of Mexico's GDP of 0.4% in 2025 due to the uncertainty generated by U.S. tariffs, although it also expects that growth will recover with an increase of 1.2% in 2026. In its last report on the situation in this Latin American country, the [...] La entrada BBVA Research predicts a contraction of Mexico's economic growth of 0.4% in 2025 aparece primero en Forbes España.

BBVA Mexico estimates a contraction of 0.4% for the Mexican economy in 2025 due to the impact of the tariffs of President Donald Trump's government.The forecast represents a cut from the previous forecast, released in January, of a 1% increase in GDP this year, shared the country's largest bank, at a press conference.See more: Quick review of the T-MEC will dispel uncertainty: BBVA MexicoIn April, the CEO of the financial institution, Eduardo Os…

The Mexican economy is facing a remarkable slowdown and is affected by both external and internal uncertainty, with this year’s GDP falling by 0.4% this year, according to BBVA Mexico. The financial institution had planned that the activity would have a growth of 1.0%, but Donald Trump’s tariff policy, as well as judicial reform cause a cautious environment. We decided to review downward the forecast of economic growth to a contraction of 0.4% i…

BBVA Mexico a contraction in the Mexican economy of -0.4% this year in the face of the fall in investment and the uncertainty caused by the commercial tensions. The previous estimate was of a 1% growth. Carlos Serrano, economist in chief of BBVA Mexico, stressed that the Mexican economy will lose 25,000 jobs before the Mexican Social Security Institute (IMSS). If this figure is realized, it will be the worst record in the last 15 years without t…

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Expansion broke the news in on Tuesday, June 10, 2025.
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