Vehicles made in Mexico and sent to the US will pay a 15% tax rather than the original 25% previously expected, Mexico’s Economy Minister Marcelo Ebrard confirmed Tuesday.
According to Reuters, citing Ebrard, the competing tariff rates vary only because Mexican exports that comply with the US-Mexico-Canada Agreement (USMCA) get preferential discounts.
This discount gives Mexican automakers a big edge over their counterparts in countries that ship automobiles into the United States.
Ebrard, speaking at a public event, praised the tariff rate but noted that the benefits enshrined in the trade deal are “what matter.”
He said it “is a very big advantage compared to other countries that sell to the United States,” although he acknowledged Mexico would like to see zero tariffs.
USMCA offers preferential treatment to exports and their granting of tariff cuts to lessen the burden of US import taxes on auto exports.
US tariff policy and its impact on North American trade
The tariff dispute between the United States and its trading partners heated up in March 2025, when President Donald Trump’s government imposed a new 25% tariff on all cars not manufactured in the United States.
This tariff went into effect in April 2025, raising concerns among automakers in Mexico and Canada, which rely significantly on US exports for their automotive industries.
However, under the rules of the USMCA, which replaced the North American Free Trade Agreement (NAFTA), automakers from Mexico and Canada are eligible for lower tariffs.
The preferred tariff reduction method entails confirming the percentage of US-made components used in each vehicle.
This method allows automakers to reduce the tax from 25% to a lower rate, based on the percentage of US content in the car.
According to Ebrard, if authorised by the US Department of Commerce, this certification ensures that the 25% tariff applies exclusively to the non-US portion of the vehicle, while the US-made parts remain tariff-free.
Challenges in the certification process
The steps for the certification are far from simple. Under the deal, businesses requesting cuts to tariffs will have to provide extensive declarations detailing the percentage of US content in their vehicles.
The United States’ authorities will look closely at the process to comply with all the requirements. If US Customs finds that companies misreported the amount of US content in their declarations, they would end up being charged retroactively with tariffs, with the full 25 per cent rate imposed on their exports.
The certification only lasts for six months, and automakers will need to regularly prove that their vehicles continue to meet the certification criteria to enjoy the reduced tariff benefits.
Officials in Mexico have been working closely with automakers to maximise the amount of qualifying tariff reductions automakers can access under the USMCA.
Implications for the Mexican automotive sector
Mexico is a major player in the automobile sector, being among the top car exporters to the United States.
The country’s auto manufacturing sector is an important part of its economy, with several foreign automakers opening factories in Mexico to take advantage of cheaper labour costs and advantageous trade conditions.
The favourable tariff reductions are a relief for Mexican automakers, who had dreaded the impact of the Trump administration’s broad tariff on non-US-made vehicles.
To avoid disruptions in their supply networks and trade links, automakers pressed the US government to moderate its tariff approach.
The 15% tax, while still greater than prior rates, is a more bearable burden for producers than the full 25% duty that would have been imposed without the special concessions.
Looking ahead: Trade relations and industry adaptation
Tariffs are not the end of the story, leaving the future of North American trade ties uncertain. The USMCA is being negotiated by Mexico, Canada, and the US, with a focus on balancing economic and trade policy objectives.
The automobile sector, which accounts for a significant portion of the region’s industrial and economic production, is likely to remain a popular topic in debates.
Mexican automakers will, for now, operate under the USMCA umbrella to have access to its tariff reliefs during the interim.
The 15% tariff gives a crucial buffer as the industry adjusts to the new trade reality and reduces the impact of the US import tax policy.
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