MEXICO CITY, Jan 31 (Reuters) - If U.S. President Donald

Trump follows through on his pledge to slap 25% tariffs on

imports from Mexico it could usher in a volatile new chapter in

the longstanding trade relationship with the impacts hitting

consumers.

Mexico is the United States' largest trading partner,

representing over 15% of total trade. The U.S. imported more

than $475 billion worth of Mexican products in 2023, a figure

that has grown about 70% over the last decade, census data

showed. U.S. exports to Mexico also accounted for more than $322

billion.

With this heavy mutual reliance, where did the threat of

tariffs come from and how would consumers be affected?

WHEN DID TRUMP START MAKING THESE TARIFF THREATS?

New tariffs on imported goods, including against Mexico

which is a partner in the United States-Mexico-Canada Agreement

(USMCA), emerged as a campaign trail pledge by Trump to protect

American industry and push policy demands. His promises ranged

from a universal tariff on foreign-imported goods to tariffs

higher than 200% on vehicles imported from Mexico.

Trump wants to create the External Revenue Service, a

government body "to collect tariffs, duties, and all revenue"

from foreign sources, arguing that Americans have for too long

been taxed by the Internal Revenue Service (IRS) and that it was

time for those who benefit from trade to start paying "their

fair share."

In the case of Mexico, Trump has used the threat of tariffs

to pressure the administration of President Claudia Sheinbaum to

further crack down on migration and fentanyl trafficking.

As recently as Thursday, Trump said he still planned to

implement the 25% tariffs against Mexico and Canada.

HOW HAS MEXICO RESPONDED TO THE THREATS?

Sheinbaum and officials in her administration have suggested

Mexico would retaliate if Trump implemented tariffs with a set

of their own on U.S. exports, and warned that such tit-for-tat

measures would cause enormous economic losses for both

countries.

Sheinbaum has said she doubts Trump will follow through on

his pledge to impose the tariffs on Feb 1.

Sheinbaum has defended Mexico's willingness to stop migrants

arriving at the U.S. border and help to fight the fentanyl

epidemic in the U.S., but has also said that criminal groups in

Mexico are receiving guns illegally from the U.S.

WHAT WILL HAPPEN TO THE GOODS THE U.S. IMPORTS FROM MEXICO?

The largest sector by far to be affected by new tariffs

would be autos and auto parts, which accounted for $129 billion

worth of imports from Mexico in 2023. The supply chains of the

three members of the USMCA are heavily intertwined. Mexico and

Canada account for more than 50% of all auto parts exported to

the United States.

New tariffs are expected to pressure the bottom line of

major U.S. automakers that have plants in Mexico, like General

Motors ( GM ), ultimately raising prices of SUVs and pickup

trucks for U.S. consumers.

The next biggest categories to be impacted include electric

machinery and a wide range of parts and equipment, like motors

and generators, and motor fuels, crude oil and petroleum coke.

Beverages and spirits like tequila, mezcal, and beer also

make up a substantial portion of U.S. imports, totaling almost

$12 billion in trade.

The U.S. is also heavily reliant on Mexican agricultural

products and commodities like sugar, flour, meat and fresh fruit

and vegetables including avocados, which will see a spike in

demand ahead of the Super Bowl.