08:45 AM EST, 03/03/2025 (MT Newswires) -- A month has passed since United States President Donald Trump first threatened and then delayed a 25% tariff on Mexican goods, noted UBS.

This Tuesday, these are set to go into effect. The Mexican peso, which has trended broadly sideways since

rump's election, may face renewed pressure, wrote the bank in a note to clients.

However, despite the threats, UBS thinks the U.S. and Mexico will ultimately come to an agreement that avoids harsh tariffs given the importance of the trade relationship for both countries.

Mexico deployed more troops to the border and is now

analyzing tariffs on imports from China, according to media

reports.

Notwithstanding potential bouts of weakness in the coming days and weeks, the bank believes over the medium to longer term, the peso should trade slightly stronger against

the US dollar while still offering a sizable yield advantage.