Mexico is making zero tariffs a top priority as it prepares for United States-Mexico-Canada Agreement renegotiations, though President Donald Trump’s plans for the trade deal remain unclear.
The details: Mexican President Claudia Sheinbaum said at a press conference last week that she is seeking to eliminate U.S. tariffs on automobiles, steel, and aluminum while preserving the country’s sovereignty, as formal bilateral trade discussions with the U.S. begin ahead of the USMCA review, EV reported.
Mexico currently pays a 0% tariff if a vehicle meets USMCA rules of origin and a 25% tariff for non-USMCA-compliant vehicles or content.
Formal U.S.-Mexico USMCA negotiations opened in Washington last week, though Canada was not present as U.S. trade talks with Ottawa lag.
The USMCA agreement is set to undergo a formal review beginning in July 2026.
What they’re saying: “It is very important to recognize the benefit the United States gets from the agreement, because we know the benefit it brings to Mexico,” said Sheinbaum, per EV. “Due to the strong linkage in the [auto] industry, some parts are manufactured in Mexico and others in the United States.”
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Why it matters: Any shift in USMCA terms could directly affect vehicle pricing, inventory flow, and margin pressure across the market.
And if tariffs rise or trade rules tighten, retailers could face higher costs on key models and parts, creating added affordability challenges for shoppers already sensitive to price.
Between the lines: President Trump said as recently as January that the United States-Mexico-Canada trade agreement is not relevant to the U.S., fueling speculation that he could seek changes to the pact, to the concern of U.S. automakers.
The American Automotive Policy Council, representing the Detroit Three automakers, said USMCA is key to the U.S. being able to compete globally through regional integration.
Other major automakers, including Tesla, Hyundai, Toyota, Honda, and Volkswagen, have urged the Trump administration to extend USMCA, saying it is crucial to the American auto industry.
What they’re saying: "Our supply chains go all the way through all three countries. It's not simple. It's very complex,” said Mark Reuss, president of General Motors, in January, regarding USCMA. “The whole North American piece of that is a big strength."
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