Introduction
The trade agreement signed by Trump with the UK has cast some shadows over the USMCA zone. Spokespersons from Ford, GM, and Stellantis in the US warn that vehicles manufactured in the UK will have an easier time entering the US market than those made in Mexico and Canada. The UK vehicles will pay a 10% tariff under a relatively simple regime and are exempt from steel tariffs. In contrast, vehicles made in North America will face a 25% tariff due to their steel and aluminum content and must navigate complex regulations to enter the US market. They need to prove that their non-North American content does not exceed 25%.
Beyond the USMCA: Other Trade Agreements
If it were only the US-UK and China agreements… On May 6, Trump suggested that the USMCA could be canceled without consequence. Five days later, a US-Canada approach to China led to reduced tariffs and sparked speculation about a more pragmatic chapter in the US-China decoupling saga. The surprise agreement between the US and China was welcomed by stock markets, interpreted as Trump acknowledging the need to maintain or restore some economic ties with China for technology, key industries, and keeping the Chinese market open to US companies.
Trump’s Overseas Visits and Announcements
This week, Donald Trump is touring the Middle East, announcing significant deals: Saudi Arabia has committed to purchasing aircraft, armaments, and technology worth tens of billions of dollars. Saudi Arabia also pledged investments of $60 billion in the US. The itinerary includes a stop in Syria for arms sales and oil deals worth billions.
Impact on Mexico
Several things seem clear: competition is fierce, and the scenario changes rapidly. We are in a moment where it’s hard to distinguish between noise and message, between fluff and substance, between the news that will last a week and the events shaping history.
The fact remains that Donald Trump and his team have not forgotten about Mexico, though this is not necessarily positive. The “Worm Eater” episode exemplifies this. Something went wrong in the binational cooperation, preventing Mexico from exporting live cattle for at least two weeks and causing daily losses of around $5 million.
We speak of uncertainty, but in reality, there’s certainty that something bad is happening. Julio Berdegué’s face tells a story, but he cannot speak. These are times to swallow toads, to fight worms or pay water debts.
A 5% tariff on remittances looms, insignificant to the US budget but a cold shower for migrants and families relying on regular remittances.
Every week brings a “surprise.” The most crucial aspect is that our neighbor and primary trading partner has imposed tariffs to compel us to meet their migration and anti-fentanyl, anti-cartel requirements.
The tariff imposition is justified as an emergency case under US legislation, contradicting the USMCA’s spirit. No T-MECA mechanisms have been used to warn Mexico and Canada, nor have their arguments been considered.
The USMCA review will be expedited, according to Mexico’s Secretary of Economy, Marcelo Ebrard. Instead of June 2026, it will occur in the second semester of 2025. Adjusting the calendar seems logical given the new reality. What will happen? Mexico and Canada want it to continue. There are good ideas on both sides to strengthen a pact offering competitiveness and future for North America.
Key Questions and Answers
- What is the impact of these agreements on Mexico? Competition is fierce, and the situation changes rapidly. It’s challenging to distinguish between noise and message, between fluff and substance, or between short-term news and long-term history-shaping events.
- What happened with the “Worm Eater” episode? There was a failure in binational cooperation, causing a two-week delay in Mexico’s live cattle exports, resulting in daily losses of approximately $5 million.
- What is the proposed 5% tariff on remittances? This tariff, insignificant to the US budget, will negatively impact migrants and families relying on regular remittances.
- Why are tariffs being imposed on Mexico? Tariffs are justified as an emergency case under US legislation, contradicting the USMCA’s spirit. No T-MECA mechanisms have been used to warn Mexico and Canada, nor have their arguments been considered.
- What are the plans for the USMCA review? The USMCA review will be expedited, according to Mexico’s Secretary of Economy, Marcelo Ebrard. Instead of June 2026, it will occur in the second semester of 2025.
