How Trump’s Tariffs Will Disrupted Key Industries in Mexico

The US government has imposed 25 percent tariffs for all imports from Mexico and Canada. The measure, encouraged by Donald Trump, threatens the free trade system that the three countries have maintained for more than 30 years.

Even before the confirmation that the tariffs had entered into force on March 4, Marcelo Ebrad, Head of the Mexican Ministry of Economy (SE), warned that these taxes would represent An An AN Approximation out of $ 20.5 billion for about $ 89 million. He also warned of the possible inflationary impact on products such as computers, TVs, refrigerators, farm goods, auto parts and vehicles.

Mexico is a key trading partner for the United States. Between January and November 2024, Mexican exports amounted to $ 466.6 billion, while US exports reached $ 309.4 billion.

In Mexico, these percentages will especially affect the automotive and electronic sector. The automotive and electronic industry represents approximately 46 percent of Mexican sales, with the combined value estimated at $ 200 billion.

The automotive industry is at risk

The automotive industry showed significant regional integration under the United States Agreement Mexico-Canada (USMCA). This agreement allows foreign companies that produce in Mexico or Canada and use local materials to export their products to the United States at low tax rates.

The Trump administration claims that this condition was used by China to strengthen its automotive industry. Mexico became the third largest exporter of vehicles worldwide. Between 2022 and 2023, its sales increased by 14.33 percent and reached a value of $ 188.9 million, according to the World Trade Organization. Most of these units have been sent to the United States, although the origin of many can be traced back to China, which has established itself as the main supplier of cars in Mexico, with exports reaching $ 4.6 billion in 2023, according to SE.

The national automotive unit in Mexico (INA) has warned that the imposition of rates on imports of Mexican imports will weaken trade, reduce competitiveness in the region and affect economic stability. In a statement, she stressed that the automotive and authors sector is a pillar of exports to North America, with the capacity to generate more than 11 million jobs in USMCA countries. The Association provides that meetings in Mexico could reduce production by up to one million units this year due to new taxes that would affect the availability of the product, job creation and supply chain.

The main countries that produce automotive parts in Mexico are Mexico City, Chihuahua and Nuevo Leon. Experts say the most affected companies would be collections of American, Japanese and European descent. Ebrad has estimated that the new tax burden will affect 12 million households in the United States, with up to $ 10.4 billion in this area in this area. As an example, he pointed out that 88 percent of pickups sold in the United States come from Mexico and are assembled by companies such as General Motors, Ford and Stellantis.

The Minister of Economy stressed that tariffs will represent that the United States is striving in the legs, as this will directly affect its own car companies that depend on Mexican production to deliver their internal market.

Electronics Prices in Growth

The electronics and appliances sector will also be affected. In November 2024, Mexican exports of electrical and electronic equipment reached $ 8.9 billion, 88.8 percent of which were intended for the United States. The production of these devices is concentrated in Baja California, Chihuahua and Nuevo Leon, where thousands of jobs and factories can be at risk.

Trump’s tariffs will be of great importance to US users. A SEC survey estimates that the additional tax would cost an additional $ 7.1 billion for $ 40 million, buying computers. About 32 million households are expected to pay up to $ 2.4 million in additional dollars when buying new monitors, and about five million families will bring additional $ 817 million costs when buying refrigerators.