Any potential increase in U.S. tariffs on goods from Mexico has been paused for 90 days—providing affected automakers with a brief sight of relief.
The details: President Trump announced Thursday that he would extend the current deal with Mexico that includes 25% tariffs on goods imported from Mexico (for at least 90 days) —following a “very successful” call with Mexican President Claudia Sheinbaum.
Trump had threatened to raise the duties to 30% to push Mexico to work more aggressively to address border-related crime and human trafficking.
The current tariffs imposed on Mexico include 25% levies on auto imports and some parts, as well as 50% duties on steel, aluminum, and copper.
What he’s saying: “More and more, we are getting to know and understand each other. The complexities of a Deal with Mexico are somewhat different than other Nations because of both the problems, and assets, of the Border…We will be talking to Mexico over the next 90 Days with the goal of signing a Trade Deal somewhere within the 90 Day period of time, or longer,” wrote President Trump (via Truth Social).
Why it matters: The pause on plans to raise tariffs on Mexican goods gives automakers some short-term relief from escalating costs and time to adjust their operations while working to mitigate the fallout from the current levies.
Between the lines: Trump’s decision to hold off on increasing the 25% levies for Mexico comes amid some growing concerns about how the tariffs are affecting the U.S. automotive industry.
Ford—which manufactures the Mustang Mach-E, Bronco Sport, and Maverick pickup truck in Mexico—reported that tariffs will cost the company $2 billion this year.
GM—which currently builds the gas-powered models of the Chevrolet Blazer and Equinox in Mexico—took a $1.1-billion hit from tariffs in Q2 and expects the damage to worsen in the second half of the year.
Stellantis—which manufactures the Jeep Compass SUV and Jeep Wagoneer S EV in Mexico—expects the tariffs to cost it $1.4 billion in the second half of the year, alone.
Bottom line: If a new trade deal isn’t reached within the 90-day window, affected automakers will continue to face uncertainty and pressure—putting additional strains on the companies to shift production out of Mexico, renegotiate supplier contracts, and raise vehicle prices in the U.S. market.
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