What if Mexico loses its USMCA tariff exemption?
A 30% wall on Mexican goods is a peso and US-auto shock, not primarily a China/Nasdaq event: USDMXN gaps higher and Ford/GM/Stellantis margins compress on broken cross-border supply lines while Mexico's grain retaliation lifts CBOT corn. Rhymes with the 2018 NAFTA-renegotiation scare and Trump's 2019 5%-tariff tweet that spiked USDMXN ~3% intraday. Mexico is the US's largest goods partner and runs deep auto integration, so transmission is bilateral and fast; the novel risk is nearshoring capex already sunk, amplifying the hit.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. US ends USMCA produce and auto carve-outs, imposing 30% on Mexican-origin goods; peso slides and Mexico retaliates on US grain. The trigger decomposes into signed root‑shocks — Growth surprise ▼ · Inflation surprise ▲ · Trade tension ▲ · EM currencies ▼ — which propagate through our causal graph to the markets below.