Overview and Key Players
Starting November 1, Mexico’s heavy-duty vehicle industry will be subject to a 25% tariff on US imports, impacting the competitiveness of North America and raising truck prices by up to $35,000 in the US.
Mexico is the leading exporter of tractors to the US and the fourth-largest global exporter of commercial and passenger vehicles. Over 90% of Mexico’s truck production is shipped to the US.
Industry Compliance and Tariff Impact
The National Association of Bus, Truck, and Tractor Producers (ANPACT) states that the industry adheres to the 64% regional value content rule (VCR), along with the 45% labor cost rule and the 70% steel and aluminum rule. This results in an average tariff of approximately 11% for exporting vehicles to the US.
The American Trucking Associations estimated earlier this year that a 25% tariff on Mexico could increase the price of new tractors by up to $35,000.
US Tariff Rationale and Industry Response
The US claims the tariffs aim to protect national security. The proclamation states that this would be achieved if 80% of medium and heavy-duty commercial vehicles (MHCV or MHDV) sold in the US were manufactured domestically. However, meeting this requirement seems unlikely.
The heavy-duty vehicle industry in Mexico operates with high competitiveness and corporate governance, strictly adhering to T-MEC rules of origin and serving as a regional integration pillar.
“All ANPACT exporting partners fully comply with the T-MEC; no Mexican-made truck or tractor destined for the US is outside these rules of origin. No manufacturer has requested alternative transition regimes,” said ANPACT president Rogelio Arzate, reminding the commitment to elevate regional value content to 70% by 2027.
Interconnected Supply Chain and Regional Integration
“Our supply chain is deeply interconnected in North America, generating shared benefits for Mexico, the US, and Canada; any tariff measure would affect this integration,” Arzate emphasized.
Current Industry Situation and Vulnerability
The heavy-duty vehicle industry in Mexico faces a “complicated” situation with negative production and export figures, comparable to pandemic data.
“We share the concern about knowing the details of the measures the US government plans to implement with this proposed tariff,” Arzate mentioned recently regarding potential tariff imposition.
Vulnerable Manufacturers
Mexican truck manufacturers most exposed and exporting to the US are Freightliner Daimler and International.
