Mexico Begins 40-Day Negotiations with the U.S. on Cars, Steel, and Aluminum
The Secretary of Economy, Marcelo Ebrard, announced that Mexico is in a crucial stage to safeguard its automotive industry as well as the steel and aluminum sectors. Over the next 40 days, the country will seek to obtain the best trade conditions in light of the new tariffs imposed by the United States. This negotiation takes place within the context of a new global trade order characterized by reciprocal tariffs set by U.S. President Donald Trump, under which Mexico has managed to maintain a zero rate for products that comply with the USMCA, an achievement the government considers significant.
However, the current agreement does not cover all products. In the automotive sector, Trump imposed a 25% tariff on finished vehicles that do not contain American content for Mexico and Canada. While auto parts currently do not face tariffs, they are subject to review. Mexico is also looking to protect its exports of steel and aluminum, which make up just over 2% of its shipments to the United States. According to the government, there is room to maneuver, given that the neighboring country maintains a trade surplus in this area. The Mexican government has activated "two parallel letters" from the USMCA that allow for the establishment of bilateral dialogue channels on these issues. The goal is to ensure preferential conditions that maintain Mexico's competitiveness against other countries. “The challenge is to consolidate Mexico's position in this new trading system and maximize our comparative advantages,” Ebrard mentioned. He assured that the country has better conditions to compete, not only due to its geographic proximity to the United States but also because of duty-free access to its market for most goods. This outcome is not insignificant, as the treaty remains in effect, Ebrard emphasized. The continuation of the USMCA, which offers zero tariffs for compliant products, protects over 10 million jobs in critical sectors such as agribusiness, electronics manufacturing, electrical, chemical, textile, footwear, machinery and equipment, as well as medical and pharmaceutical devices.
It is crucial for Mexico to continue strengthening its position in these negotiations, as the future of trade and millions of jobs depends on favorable agreements. Diversifying markets and maintaining a proactive approach toward competitiveness will be key to adapting to changes in the global trading environment. Mexico's ability to negotiate harmoniously from its geographic advantage with the United States can lead to significant long-term benefits.
