How Trump's Tariffs Will Disrupt Key Industries in Mexico

The US authorities has imposed tariffs of 25 percent connected each imports from Mexico and Canada. The measurement promoted by Donald Trump threatens the escaped commercialized strategy that the 3 countries person maintained for much than 30 years.

Even earlier the confirmation that the tariffs went into effect connected March 4, Marcelo Ebrard, caput of the Mexican Ministry of Economy (SE), warned that these taxes would correspond an approximate cost of $20.5 cardinal dollars for astir 89 cardinal American families. He besides warned of the imaginable inflationary interaction connected products specified arsenic computers, televisions, refrigerators, cultivation goods, car parts, and vehicles.

Mexico is simply a cardinal trading spouse for the United States. Between January and November 2024, Mexican exports totaled $466.6 billion, portion American exports reached $309.4 billion.

In Mexico, these rates volition peculiarly impact the automotive and electronics sectors. The automotive and electronics industries correspond astir 46 percent of Mexican sales, with a combined worth estimated astatine $200 billion.

The Automotive Industry Is astatine Risk

The automotive manufacture has shown important determination integration nether the United States-Mexico-Canada Agreement (USMCA). This statement allows overseas companies that nutrient successful Mexico oregon Canada and usage locally sourced materials to export their products to the United States astatine debased taxation rates.

The Trump medication has argued that this information has been exploited by China to fortify its automotive industry. Mexico has go the third-largest exporter of vehicles worldwide. Between 2022 and 2023, its income grew by 14.33 percent and reached a worth of 188.9 cardinal dollars, according to the World Trade Organization. Most of these units are shipped to the United States, though the root of galore tin beryllium traced backmost to China, which has established itself arsenic Mexico's main car supplier with exports reaching $4.6 cardinal successful 2023, according to the SE.

Mexico's National Auto Parts Industry (INA) has warned that the imposition of tariffs connected Mexican imports volition weaken trade, trim competitiveness successful the region, and impact economical stability. In a statement, it stressed that the automotive and car parts assemblage is simply a pillar of North American exports, with the capableness to make much than 11 cardinal jobs successful the USMCA countries. The relation foresees that assemblers successful Mexico could trim accumulation by up to 1 cardinal units this twelvemonth owed to the caller taxes, which would impact merchandise availability, occupation creation, and the proviso chain.

The main states producing automotive parts successful Mexico are Mexico City, Chihuahua, and Nuevo Leon. Experts accidental that the astir affected companies would beryllium assemblers of US, Japanese, and European origin. Ebrard has estimated that the caller taxation load would impact 12 cardinal households successful the United States, with an summation successful spending of up to $10.4 cardinal successful this area. As an example, helium pointed retired that 88 percent of the pickups sold successful the United States travel from Mexico and are assembled by companies specified arsenic General Motors, Ford, and Stellantis.

The Minister of Economy emphasized that the tariffs would correspond the United States shooting itself successful the foot, arsenic it would straight interaction its ain automotive companies, which beryllium connected Mexican accumulation to proviso their home market.

Electronics Prices connected the Rise

The electronics and appliance assemblage volition besides beryllium affected. In November 2024, Mexican exports of electrical and physics instrumentality reached $8.9 billion, 88.8 percent of which were destined for the United States. The accumulation of these devices is concentrated successful Baja California, Chihuahua, and Nuevo León, wherever thousands of jobs and assembly plants could beryllium astatine risk.

Trump's tariffs volition person important implications for US consumers. An SEC survey estimates that the further levy would outgo an other $7.1 cardinal for 40 cardinal families purchasing computers. Likewise, it is expected that astir 32 cardinal households would wage up to $2.4 cardinal further dollars erstwhile purchasing caller monitors, and astir 5 cardinal families would presume an other disbursal of $817 cardinal erstwhile purchasing refrigerators.