Introduction to the US Trade Department’s New Guidelines
The United States Department of Commerce published procedures on Tuesday for obtaining tariff discounts on auto imports, applicable only to Mexico and Canada under the stipulations of the United States-Mexico-Canada Agreement (USMCA).
Background on Tariff Imposition
Former President Donald Trump had previously imposed a 25% tariff on certain auto imports and auto parts from Mexico and Canada, respectively, starting April 3, 2025, and May 3, 2025.
USMCA Tariff Preference Provisions
However, Trump’s proclamation also established that vehicles qualifying for tariff preference under the USMCA can submit documentation to the Department of Commerce to identify US content in each imported model.
Import Data and USMCA Eligibility
In 2024, the US imported approximately 8.1 million vehicles from around the world, valued at roughly $248.8 billion, according to the auto categories outlined in Annex I of the proclamation.
Of these, about 3.7 million (approximately 46%) were recorded in US trade statistics as eligible for USMCA preference. Within this volume, 1.07 million vehicles were imported from Canada and 2.66 million from Mexico.
Potential Tariff Exemptions
These figures theoretically represent the upper limit of autos that could be eligible for tariff exemptions based on US content in these imports.
According to analysts, the US violates the USMCA by imposing tariffs on autos imported from Mexico or Canada that meet USMCA requirements.
Reactions from Mexican Officials
Marcelo Ebrard, Mexico’s Secretary of Economy, commented during a COA conference in Mexico City:
Hoy se publica, por ejemplo, un acuerdo que yo veo muy positivo, que establece un trato preferencial para la industria automotriz en México y Canadá, con relación a la industria automotriz de otros países del mundo.
— Marcelo Ebrard (@marceloebrard) May 20, 2025
“I see this agreement as very positive, which establishes a preferential treatment for the automotive industry in Mexico and Canada compared to the automotive industries of other countries in the world,” Ebrard said during a COA conference in Mexico City.
He further added:
That decree, which is published today, says that on average between 40 and 50% of tariffs for motor vehicles will be reduced, compared to other countries in the world.
— Marcelo Ebrard (@marceloebrard) May 20, 2025
Perspective from Americas Society/Council of the Americas
Susan Segal, President and CEO of the Americas Society/Council of the Americas, expressed her conviction:
“I am convinced that the concept of an integrated North America through the USMCA will continue, as it ultimately benefits all three countries,” she said at the same COA event.
