The US government imposed rates of 25 percent on all imports from Mexico and Canada. The measure promoted by Donald Trump threatens the free trading system that has maintained the three countries for more than 30 years.
Even before the confirmation that the rates came into effect on March 4, Mexican Ministry of Economy Head Marcelo Ebrard warned that this tax would represent a about $ 20.5 billion for about 89 million US families. He also warned about the possible inflationary impact on products such as computers, televisions, refrigerators, agricultural goods, auto parts and vehicles.
Mexico is an important trading partner for the United States. Between January and November 2024, Mexican exports amounted to $ 466.6 billion, while US exports amounted to $ 309.4 billion.
In Mexico, these rates will especially affect the car and electronic industries, which represent about 46 percent of Mexican exports, with a joint value of about $ 200 billion.
The automotive industry is in danger
The automotive industry has shown significant regional integration under the United States Mexico Canada Agreement (USMCA). This agreement allows foreign companies that produce in Mexico or Canada and use locally acquired materials to export their products at low tax rates to the United States.
The Trump administration argues that this condition was exploited by China to benefit its automotive industry. Mexico has become the third largest exporter of vehicles worldwide. Between 2022 and 2023, sales grew by 14.3 percent and reached a value of $ 188.9 million, according to the World Trade Organization. Most of these units are sent to the United States, although the origin of many can be traced back to China, which established itself as Mexico’s most important car supplier, with exports amounting to $ 4.6 billion in 2023, according to the Ministry of Economics.
The national auto parts industry in Mexico has warned that the imposition of rates on Mexican imports will weaken the trade, reduce competitiveness in the region and affect economic stability. In a statement, it emphasized that the car and auto parts sector is a pillar of North American exports, with the ability to generate more than 11 million jobs in the USMCA countries. The association believes that compilers in Mexico could reduce production by as much as 1 million units this year due to the new tax, which would affect the availability of the product, job creation and the supply chain.
The most important states that produce auto parts in Mexico are Mexico City, Chihuahua and Nuevo León. Experts believe that most affected companies would be meetings of us, Japanese and European origin. Ebrard estimated that the new tax burden will affect 12 million households in the United States, with an increase in spending of up to $ 10.4 billion in this area. As an example, he pointed out that 88 percent of the bakkies sold in the United States come from Mexico and compiled by companies such as General Motors, Ford and Stellantis.
The Minister of Economics emphasized that the tariffs would represent the United States of America, as it would directly affect its own car businesses, which depends on the Mexican production to provide their domestic market.
Electronic prices on the rise
The electronic and device sector will also be affected. In November 2024, Mexican exports of electrical and electronic equipment reached $ 8.9 billion, of which 89 percent were destined for the US. The production of these devices is concentrated in Baja California, Chihuahua and Nuevo León, where thousands of jobs and assembly plants can be at risk.
Trump’s rates will have significant implications for US consumers. A SEC study estimates that the additional levy would cost an extra $ 7.1 billion for 40 million families buying computers. Similarly, about 32 million households would pay up to $ 2.4 million more when buying new monitors, and that about 5 million families would adopt an extra cost of $ 817 million when buying refrigerators.