Mexico aims to significantly increase the share of compliant exports to the U.S. under the U.S.-Mexico-Canada Agreement (USMCA) in the coming weeks, following Washington’s decision to pause tariffs on Mexican shipments that meet the trade pact’s rules. Economy Minister Marcelo Ebrard announced on Friday that over half of Mexico’s exports to the U.S. currently comply with USMCA standards, making them eligible for the tariff reprieve. He projected that compliance could rise to 85%-90% as companies transition from shipping under the “most-favored nation” clause to adhering to USMCA requirements.
However, Ebrard acknowledged that a segment of exporters, particularly in the auto sector, accounting for 10%-12% of shipments, may face challenges in meeting the rules of origin. Mexico plans to engage with auto manufacturers in the coming weeks to address these issues. While major automakers like General Motors, Ford, and Stellantis have welcomed the tariff exemption for compliant goods, competitors failing to meet USMCA standards could still face a 25% tariff.
The USMCA rules of origin mandate that a specific percentage of vehicle parts, as well as the steel and aluminum used in manufacturing, must be sourced from within the region. This has created complexities for the highly integrated North American auto supply chain, where parts often cross borders multiple times during production. In 2024, the U.S. imported $181.4 billion worth of autos and auto parts from Mexico, accounting for nearly 10% of Mexico’s economy, according to Goldman Sachs.
In addition to addressing auto sector challenges, Mexican officials are set to meet with U.S. trade authorities next week to discuss tariffs on steel and aluminum imports. Ebrard emphasized that Mexico imports more steel and aluminum from the U.S. than it exports, arguing that there is no justification for such tariffs. The discussions come as the U.S. continues to focus on reducing trade deficits, a key policy under President Donald Trump’s administration.