Mexico is confident that almost 90% of its exports to the United States will be covered by the tariff pause agreed with Donald Trump while it begins to negotiate possible options for the remaining percentage, mainly the automotive industry and the steel and aluminum sector.
As explained on Friday by the Secretary of Economy, Marcelo Ebrard, more than half of the exporting companies are currently covered by the North American free trade agreement, the T-MEC, but another percentage that did not do so —and operated under another rule— may now join the treaty to avoid the taxes.
The day before, the Trump government put on hold until April 2 the imposition of 25% tariffs on Mexican products for the second time, which has not prevented global markets and Mexican producers and businessmen from remaining on alert.
The companies that could be left out of the pause and, therefore, subject to the taxes would be mainly from the automotive sector and that do not comply with the provisions of the rules of origin, which require that up to 75% of their parts be manufactured in North America. According to Ebrard, the United States is sending “a very clear signal that compliance with the rules of origin is going to be decisive.”
The trade flow between Mexico and the United States is around 840 billion dollars annually and more than 80% of Mexican exports are destined for the neighboring country. In this flow there are industries, such as the automotive industry, in which some parts can cross the border several times as they are assembled in one country or another.
The Minister of Economy added that they have already begun to talk with the companies that would be left out of the agreement to look for options, but the issue is much more intricate than it seems because there are decisions by the Trump administration that overlap.
An example is the 24% tax on steel and aluminum exports that would come into effect on March 12 and that Trump justified by relying on laws that allow for the adjustment of imports of goods that compromise national security even if they are within the T-MEC. Ebrard said he will discuss this matter with his American counterparts next week.
According to the Mexican Institute for Competitiveness, a research center, products such as engines, refrigerators, vehicle covers and other essential parts for manufacturing and assembly will be affected in the steel and aluminum sector.
President Claudia Sheinbaum insisted that the Mexican economy remains strong, as demonstrated by a slight depreciation of the peso with the announcement of the tariffs, and that there are companies that continue to bet on the country.
During the presidential morning conference, David Geisen, vice president of Mercado Libre, announced an investment of 3.4 billion dollars in 2025 that will generate, he said, more than 10,000 new jobs. For her part, Tania Ortiz Mena, president of Sempra Infrastructure, showed the progress of energy investments underway for more than 3.5 billion dollars.
Source: latimes
