Querétaro’s Significance in the Automotive Parts Industry
Querétaro, a Mexican state, ranks as the fifth-largest producer of automotive parts in the country. In 2024, it generated $8,957 million USD and contributed 7.4% to the nation’s production, according to data from the Industria Nacional de Autopartes (INA).
State Strategy to Adhere to T-MEC Regulations
Marco Antonio Del Prete Tercero, the Secretary of Sustainable Development (Sedesu) in Querétaro, highlighted the relevance of the state’s supplier development strategy to encourage the automotive parts industry to adhere to the T-MEC rules and avoid tariffs.
Del Prete explained that a significant portion of local production already complies with the T-MEC regulations, thus protecting it from tariffs. He emphasized that the challenge lies in ensuring local suppliers align with the trade agreement’s criteria.
“The challenge is to have suppliers align with the T-MEC origin rules. Fortunately, we developed suppliers last year before the wave of tariffs and declarations. Today, we can encourage local companies to align with T-MEC criteria regarding regional content,” he stated.
Some suppliers may need certifications and process adaptations to access tariff exemptions.
Claudia Sheinbaum Pardo, the President of Mexico, confirmed that automotive parts produced under the T-MEC will be exempt from tariffs. This measure provides certainty to the local industry and allows it to continue competing in the global market.
“This confirms that we are in a favorable position, and the Querétaro industry continues to compete in an equitable environment… Much of our production fits within T-MEC rules, not just automotive, but also aerospace, electrical, electronic, plastics, etc.,” Del Prete pointed out.
The INA reiterated that the U.S. Customs and Border Protection office confirmed that parts adapting to the trade agreement will be free from the 25% tariff set to take effect this Saturday.
Uncertainty and Prolonged Payments
The first quarter of the year has been uncertain for the local industry due to U.S. tariff adjustments, causing extended payment terms in some cases, according to Sedesu’s head.
Small businesses and service providers have been the most affected by changes in payment timelines.
“There’s a lot of uncertainty, especially regarding payment terms. The primary concern for small businesses, particularly service providers, is that payment terms have been stretched,” Del Prete mentioned.
As a result, the Sedesu is working alongside these businesses to identify financing mechanisms and even negotiate with buyers to prevent negative impacts on small suppliers.
Key Questions and Answers
- What is Querétaro’s role in the automotive parts industry? Querétaro is the fifth-largest producer of automotive parts in Mexico, contributing significantly to the nation’s production.
- What is the state’s strategy regarding T-MEC regulations? The state aims to ensure local suppliers adhere to the T-MEC rules, protecting their production from tariffs.
- What challenges does the local industry face? The primary challenge is aligning suppliers with T-MEC origin rules, especially amidst U.S. tariff adjustments and prolonged payment terms.
- How does the T-MEC tariff exemption impact Querétaro’s industry? The tariff exemption under the T-MEC confirms a favorable position for Querétaro’s industry, allowing it to maintain global competitiveness.
