The commercial relationship between Mexico and the United States has been established for several decades, especially since the signing of the North American Free Trade Agreement (NAFTA) in 1994. Subsequently, the modernized Agreement between Mexico, the United States, and Canada (USMCA) came into effect in July 2020, strengthening integration in regional value chains.
Trade in goods between Mexico and the United States exceeded 700 billion dollars annually between 2021 and 2022. Global companies' assembly plants have found a favorable environment for manufacturing vehicles primarily destined for the US market in Mexico.
The export of motor vehicles is estimated at over 80 billion dollars between 2022 and 2023, generating direct employment for more than 900,000 people in Mexico, according to the Ministry of Economy. This sector also creates indirect jobs in logistics, financial, and supply services.
75-80% of the vehicles manufactured in Mexico are directed to the United States, meaning that a 25% tariff on imported vehicles and auto parts would have an immediate impact on the production costs of US manufacturers that use Mexican components.
This trade interdependence implies that any change, such as imposing tariffs on Mexican products, would significantly affect both countries. The five main sectors of Mexico's exports to the United States are Automotive, Electrical machinery and equipment, Mechanical machinery and apparatus, Mineral fuels, and Optical instruments and medical equipment.
The imposition of tariffs would directly affect companies, suppliers, workers, and economic regions related to these sectors. It is estimated that a 20% tariff would decrease the demand for Mexican vehicles in the United States, generating annual losses of up to 10 billion dollars and thousands of unemployment.
The uncertainty caused by the threat of tariffs could slow down the arrival of new investment and the expansion of plants, in addition to affecting the exchange rate and inflation in Mexico. The imposition of tariffs would have adverse effects on the competitiveness, employment, and economic stability of both countries.
