08:21 AM EDT, 08/28/2025 (MT Newswires) -- It emerged overnight Wednesday that the Mexican government is planning to introduce tariffs on Chinese products as part of its budget presentation at the beginning of September, said Commerzbank.

The United States government has long been pushing for such tariffs to prevent Chinese goods from transiting through Mexico. As a consequence, this move is likely to be seen as a further concession to United States President Donald Trump, raising hopes that Mexico will ultimately reach a new agreement with its larger neighbour, especially since higher tariffs were postponed again last month while Canada was hit with them, wrote the bank in a note to clients.

Much of the plan is still unclear, including the level of tariffs, and it may change before Sept. 8, when the budget plan is due to be sent to Congress, stated Commerzbank.

In principle, however, a good relationship with the U.S. and avoiding higher tariffs would be positive for the Mexican peso (MNX), added the bank.

Nevertheless, the Mexican government faces challenges: it must tread carefully. It must not anger the U.S., nor can it simply agree to all demands.

In addition, the Mexican real economy continues to weaken, which increases the pressure to prevent a trade war even more. So far, the Mexican president seems to be managing this balancing act well, but the risks to the peso remain, according to the bank.