Background on the Situation
In April 2025, US President Donald Trump imposed a 25% tariff on all vehicle imports to the United States, with exceptions for components that meet the criteria of the US-Mexico-Canada Agreement (T-MEC). This move affected Mexican automotive exports to the US, which fell by 15.8% to $13,197 million, while Canadian exports dropped by 16.4%. Meanwhile, global automotive shipments to the US decreased by 25%, totaling $33,899 million.
Mexico’s Role in the Automotive Industry
Mexico is the leading exporter of trucks and auto parts to the US market and the second-largest supplier of vehicles, trailing only Japan. In April 2025, Mexico accounted for $13,197 million in automotive exports to the US, more than double that of its closest competitor, Japan, which totaled $4,866 million with a 3% annual decline.
Impact on Other Countries
- Canada: Exported $4,031 million (-16.4%)
- South Korea: Exported $2,828 million (-37.8%)
- Germany: Exported $2,411 million (-34.4%)
Trump’s Trade Policies and Concerns
During Trump’s first term, he did not implement automotive tariffs but instead ordered the United States Trade Representative (USTR) to initiate negotiations with trade partners. In March 2025, Trump hardened his stance on trade negotiations, claiming that USTR efforts did not lead to any agreement under Section 232.
Trump expressed concerns about national security issues, stating that these worries had “persisted and intensified” since a 2019 investigation. He also noted that only about half of the vehicles sold in the US are locally manufactured.
Trump questioned the benefits of the T-MEC and revisions to the US-Korea free trade agreement (KORUS), asserting that these accords “have not yielded enough positive results.”
Tariff Concerns on Aluminum and Steel
In a related development, the Mexican National Association of Auto Parts (INA) voiced concern over a 25% to 50% tariff increase on US imports of steel, aluminum, and their derivatives. The INA warned that this measure would raise costs, disrupt just-in-time production, and jeopardize the ongoing operations of auto parts manufacturers and the North American automotive supply chain.
On the same day, Mexico’s Secretary of Economy, Marcelo Ebrard, reported having a meeting with the US Secretary of Commerce, Howard Lutnick, in Washington to address steel tariffs and other trade issues.
