Puerto Vallarta, Mexico – The Mexican peso weakened against the U.S. dollar in Monday’s trading session, pressured by U.S. President Donald Trump’s announcement that tariffs on Mexico and Canada will go into effect on Tuesday. Investors had been hoping for a postponement, but the president indicated there was “no chance” of avoiding the duties, rattling currency and equity markets.
According to official data from the Bank of Mexico (Banxico), the exchange rate closed at 20.7176 pesos per dollar, a decline of 13.94 cents—equivalent to 0.68%—from Friday’s closing price of 20.5782. Over the course of the session, the dollar traded between a high of 20.7471 and a low of 20.3749 pesos. Meanwhile, the Intercontinental Exchange Dollar Index (DXY), which compares the U.S. currency against six peers, dropped 0.97% to 106.57.
“After the news, the price rose abruptly,” explained financial consultant Juan Carlos Cruz Tapia. “Something relatively reassuring was that Donald Trump would speak with President Claudia Sheinbaum. This gave a slight respite to the exchange rate.”
Still, the new tariff deadline has cast uncertainty on North American trade. Trump emphasized that 25% tariffs on goods from Mexico and Canada will begin on Tuesday unless there is a last-minute change. Additionally, he announced that reciprocal tariffs on agricultural products will be implemented starting April 2, while existing tariffs on China would be doubled from 10% to 20%.
U.S. Commerce Secretary Howard Lutnick confirmed on Sunday that while the tariffs are set to take effect on Tuesday, there is still a possibility of adjustments to the exact rate. However, President Claudia Sheinbaum signaled that Mexico will wait to see how events unfold.
“We have a plan in place in case these tariffs are indeed enforced,” Sheinbaum said, adding that Mexico has been proactive on security cooperation—sending several top drug lords to the U.S.—and has proposed aligning with Washington’s approach to tariffs on China, should reciprocal actions prove necessary.
The news sparked concerns among market participants who worry that escalating trade tensions could stifle economic growth. Broker ATFX noted that the president’s stance “fuels trade fears,” particularly if tariffs are expanded or increased further in the coming weeks.
