Introduction to the Trade Tariffs and Their Impact on Mexican Auto Exports
In March 2025, trade tariffs imposed on Mexico due to border issues and additional tariffs on steel and aluminum negatively affected Mexican auto exports to the United States. The global auto exports grew by 19.3% in March, reaching $20,455 million, while Mexican exports increased by only 6.5%, totaling $4,349 million, according to the U.S. Department of Commerce.
Border Tariffs and Their Consequences
The tariffs related to border issues (IEEPA) and steel/aluminum tariffs have reduced the competitiveness of Mexican auto exports to the U.S. market since their implementation in February 2025. These tariffs are 25% for Mexico and Canada, and 20% for China.
These tariffs were applied to all Mexican products that do not comply with the USMCA (United States-Mexico-Canada Agreement) starting February 4, 2025. Furthermore, U.S. customs began charging a 25% tariff on steel, aluminum, and their derivatives from all countries starting March 12, 2025.
Mexico’s Position as a Major Auto Exporter
Being the largest exporter of autos to the U.S., Mexico’s initial trade results in auto commerce between both countries will be influenced by additional factors, such as the implementation of “reciprocal tariffs” by the U.S. government starting April 5, 2025. These tariffs range from 10% to 50%, excluding Mexico and Canada.
From January to March 2025, Mexican auto exports totaled $11,455 million with a 4.5% annual growth rate, while global auto exports to the U.S. summed $51,394 million, a 1.5% increase.
- Other notable exporters in Q1 2025: Japan ($11,455 million), South Korea ($9,001 million), Canada ($7,283 million), and Germany ($5,914 million).
The International Emergency Economic Powers Act (IEEPA)
The International Emergency Economic Powers Act (IEEPA) grants the U.S. President broad authority to regulate or prohibit imports in case of declared “unusual and extraordinary” threats to national security, foreign policy, or the economy.
On February 1, 2025, President Donald Trump invoked IEEPA, imposing tariffs on imports from the People’s Republic of China (PRC), Canada, and Mexico. Subsequent modifications included raising the tariff on PRC imports to 20% on March 3, 2025.
On April 2, 2025, Trump again invoked IEEPA to impose reciprocal tariffs on almost all U.S. trading partners.
Tariff Details and Their Effects
The new IEEPA tariffs on Mexico apply in addition to any other duty, rate, charge, or fee applicable to the covered imports. Mexico and Canada’s tariff orders are identical, except that Mexico’s order does not include a reduced tariff rate (10%) for energy or energy resources imports. Mexican energy and resource imports are subject to the full 25% tariff rate.
On March 3, Trump amended the executive order imposing a 10% tariff on all imports from China (and Hong Kong), changing the tariff rate to 20%.
In 2024, the U.S. imported 8.1 million vehicles (worth $248,800 million) primarily from Mexico, the 27 EU members, Japan, South Korea, and Canada. These five partners collectively accounted for 94% of U.S. vehicle imports by value and 96% in quantity during that year.
Key Questions and Answers
- What are the trade tariffs affecting Mexican auto exports to the U.S.? Tariffs imposed under the International Emergency Economic Powers Act (IEEPA) due to border issues and additional tariffs on steel and aluminum have negatively impacted Mexican auto exports to the U.S.
- What are the growth rates of global and Mexican auto exports in March 2025? Global auto exports grew by 19.3% in March, reaching $20,455 million, while Mexican exports increased by only 6.5%, totaling $4,349 million.
- What other factors will influence Mexican auto exports to the U.S.? Additional factors include the implementation of “reciprocal tariffs” by the U.S. government starting April 5, 2025, which range from 10% to 50%, excluding Mexico and Canada.
- What is the International Emergency Economic Powers Act (IEEPA)? IEEPA grants the U.S. President broad authority to regulate or prohibit imports in case of declared “unusual and extraordinary” threats to national security, foreign policy, or the economy.
- What tariffs were imposed on Mexican imports under IEEPA? Tariffs of 25% for Mexico and Canada, and 20% for China were imposed on Mexican imports not complying with the USMCA.
