Uncertainty follows the United States’ publication of tariffs on steel and aluminum, which target automobiles, chips, and pharmaceuticals. The crisis triggered by the possibility that the United States will impose a 25% tariff on exports has caused investments worth 60 billion dollars to be paused in Mexico, revealed Francisco Cervantes, president of the Business Coordinating Council, during the presentation of the Hecho en México program.
Although he explained that “there is a lot of interest” in making trade agreements, he acknowledged that we are in difficult times due to the threat of US tariffs on Mexico on various products after the US government published executive orders on Monday to impose a 25% increase in steel and aluminum tariffs starting March 12 on Mexico, Argentina, Australia, Brazil, Canada, South Korea, the European Union, Japan, the United Kingdom, and Ukraine, among others, because these pose a risk to national security.
This will initially have consequences for Mexico’s metalworking and automotive industries, which depend heavily on these metals. Trump accuses Mexico of using primary aluminum from China and Russia to produce finished goods made from this material and receiving Chinese investments in the industry to manufacture goods that will be exported to the US. He also claimed that Mexican steel exports have increased “significantly.”
Francisco Cervantes considered that the crisis would be brief. Although there will be some “nice tugging,” Mexico will get through it, just as it did during Trump’s first term when he threatened to end the North American Free Trade Agreement, which resulted in a new agreement: the USMCA (T-MEC).
However, Miguel Ángel Landeros, president of the Mexican Council of Foreign Trade for the West, emphasized that the tariff increases affect both businesses and consumers in Mexico and the United States. “This is very bad… and it will particularly affect the automotive sector in Jalisco. The state’s second-largest export sector is automotive, with a significant hub in auto parts. We have a Honda assembly plant and important auto parts companies.”
The US president also anticipates that the new tariff on automobiles will be imposed starting April 2, which will be around 25%. He warned that the increases will equal or higher for chips, semiconductors, and pharmaceuticals: “And they will rise significantly throughout the year” against all countries, focusing on the European Union. “They don’t take our cars, they don’t take our agricultural products, they don’t take almost anything. We’re going to have to fix this, and we will.”
Sergio Oliveira, an expert in the automotive sector, noted that auto parts prices will impact consumers in general. He explained that a car assembled in Mexico contains many U.S.-made parts, and the same happens with vehicles manufactured in the US “All of that would be subject to tariffs so that prices would rise here and in the U.S.,” he warned. This would make things easier for the Chinese.
The Mexican Employers’ Confederation (Coparmex) rejected the unilateral imposition of tariffs, stating that they violated the USMCA and threatened regional integration. “It seriously affects the steel industry and the entire production chain linked to these essential inputs.”
Juárez Has Already Lost 45,000 Jobs
The tariffs announced by the United States on Mexican exports, in addition to pausing investments worth billions of dollars, have already caused the loss of at least 45,000 jobs in the epicenter of Mexico’s maquiladora industry: Ciudad Juárez. The Border Business Bloc reported that “Ciudad Juárez has already lost more than 45,000 jobs in recent months, and this causes other types of problems. We will also see, I mean, we don’t want to think about it, but there could be an inflationary problem,” warned representative Thor Salayandía.
In Ciudad Juárez, one of Mexico’s main export manufacturing centers, business leaders warn that the situation is critical due to a significant reduction in foreign investment and the possible closure of plants if the US tariffs on Mexico are implemented.
“No one wins, neither the United States nor Mexico, when you look at it from an economic perspective, from the viewpoint of the border, where we depend heavily on the maquiladora industry. Sixty percent of formal employment is involved in the maquiladora industry,” stated Salayandía.
Promoting National Consumption
Around 200 people, including singers such as Manuel Mijares, artists, athletes, creators, and businesspeople, will form the Hecho en México Promotional Council. This council will promote products made in Mexico nationally and internationally.
During the presentation, Economy Secretary Marcelo Ebrard explained that this brand would be promoted and that companies manufacturing products in the country could use the label.
The Hecho en México brand is for products manufactured, made, or assembled with entirely national inputs and/or whose manufacturing occurs in Mexico, regardless of the origin of the inputs.
If the US tariffs on Mexico were enacted, Mexico’s competitiveness in the manufacturing industry would be affected.
As the deadline set by Trump approaches, business owners and workers are urging the Mexican government to intervene to prevent an economic blow that they believe could have devastating consequences for the border region.
Conclusion
The potential implementation of US tariffs on Mexico has caused significant uncertainty, particularly regarding the steel, aluminum, automotive, chips, and pharmaceutical industries. These tariffs, which include a 25% increase on exports starting March 12, could impact investments worth $60 billion and already have led to a loss of 45,000 jobs in Ciudad Juárez, a key manufacturing hub. Mexican business leaders are concerned that the tariffs will disrupt the economy, especially in the automotive sector, which heavily depends on US-made parts. Although some leaders remain optimistic, drawing comparisons to previous trade challenges, the tariffs threaten regional integration and could increase consumer prices in Mexico and the US. The Mexican government has been urged to intervene to mitigate potential economic damage, especially in border regions. The Hecho en México campaign has been introduced to promote national products, but if the tariffs are enacted, Mexico’s competitiveness in manufacturing could be severely impacted.