By Cassandra Garrison and Diego Oré

MEXICO CITY (Reuters) – Mexico must maneuver carefully now that Donald Trump has secured his return to the U.S. presidency, but Mexican President Claudia Sheinbaum still has room to negotiate to mitigate the impact on trade, migration and security.

Trump’s campaign rhetoric, including 200% tariffs on cars from Mexico, mass expulsions and U.S. military action against drug cartels, puts Sheinbaum in a difficult position. An initial deterioration in relations between the two countries – and a blow to the Mexican peso – are likely.

But in the longer term, analysts say, Mexico has some leverage, particularly on migration, which could help dilute some of Trump’s promises in areas such as trade and security.

“What we know about Trump is that he is transactional,” said Mariana Campero, a senior associate in CSIS’s Americas program.

Campero said Sheinbaum — who took office last month — would be better served taking a cue from the playbook of his mentor and predecessor, Andres Manuel Lopez Obrador. Lopez Obrador found a way to work with Trump during his first term, ensuring greater enforcement of migration law and steering relations away from U.S. economic policy options that would have been most harmful to Mexico.

“Sheinbaum might say, ‘Okay, Mexico can take back (deported) Mexican nationals, but you won’t impose tariffs,'” Campero added.

Mexico could also rely on U.S. businesses, many of which benefit greatly from the North American CUSMA trade deal, to lobby against significant tariff increases. The current USMCA was negotiated under Trump and has proven far less damaging to Mexico than Mexican officials had initially feared.

The USMCA is due to be revised in 2026 and these discussions are expected to be a key moment in the Sheinbaum-Trump relationship. Mexico will likely begin preparing immediately with “a better defined and more aggressive strategy” to identify politicians who might be good at communicating with Trump, said Antonio Ocaranza, who was a spokesman for former President Ernesto Zedillo .

Sheinbaum’s appointment of Economy Minister Marcelo Ebrard – a former foreign relations chief for Lopez Obrador who has personal experience dealing with Trump – was seen as a powerful signal that Mexico is preparing with its best power. political fire for the USMCA review, analysts said.

China is another area of ​​potential tension.

Despite U.S. pressure, Mexico has let Chinese companies expand their presence in recent years and is considering establishing an incentive program open to companies from any country interested in investing in Mexico.

Trump, meanwhile, has pledged to impose 60% tariffs on Chinese goods and a levy of at least 10% on all other imports.

Mexico’s incentive package to attract investment — which does not exclude China — could put it on a collision course with the Trump administration.

“It’s not good news in the sense of what’s coming for bilateral relations,” said Lila Abed, director of the Mexico Institute at the Washington-based Wilson Center, adding that Mexico’s relations with China could be a major sticking point in the USMCA. goodbye.

When it comes to drugs and security, Mexico also expects difficulties.

Sheinbaum’s administration is keenly aware that reducing the flow of fentanyl, the deadly synthetic opioid that kills tens of thousands of Americans each year, will be a priority between the two leaders, analysts said. Sheinbaum will need to be willing to cooperate and show results in order to gain the political capital needed to push back against Trump’s more radical ideas, such as U.S. military intervention against Mexican cartels.

Such an incursion would risk causing enormous damage to relations between interdependent economies, but cannot be ignored, according to Abed.

“I think it’s a real option that’s on the table,” she said.

(Reporting by Cassandra Garrison and Diego Ore, editing by Rosalba O’Brien)