The Ministry of Economy considered that Mexico will have an advantage over other countries after the measures announced by the Donald Trump government to reduce tariffs to the automotive sector.
The agency considered that “a preferential treatment of zero tariff is granted on the export of engines, harnesses, suspensions and other components used for the assembly of light vehicles in the United States.”
The provisions announced on Wednesday “modify measure 232, which had imposed a 25% general tariff on light cars, which was cumulative with other tariffs,” he recalled on an informative card regarding the new provisions in the manufacture and import of Washington.
The declared objective of the US government is to increase the national automobile production to strengthen its national security.
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“However, the set of announced measures gives Mexico better export conditions than those that will prevail for other competitors. These conditions, although not optimal, place Mexico in a relative advantage position over other countries that export vehicles to the US,” said the SE.
Among the new provisions it was pointed out that the new measure only applies to light vehicles assembled in the United States; that all the content within the Mexico, EU and Canada Trade Agreement (TMEC) of the light vehicles assembled in the US will have a zero tariff and that will pay 25% tariff everything imported that does not come from these three countries.
He also pointed out that the US government will support with tax credits the producers of that country with 3.75% of the value of the car the first year (2025-2026), and with 2.5% the second year (2026-2027) in order to reduce the load by tariff especially that imported not from TMEC.
On the preferential treatment of TMEC components, it was indicated that the proclamation also establishes that tariffs will not double; That is, those who pay a car tariff, will not be subject to payment of additional rates.
For example, in the case of Mexico, automotive companies that pay for their exports to the United States will not be subject to possible tariff payments for fentanyl and migration, or by steel and aluminum.
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Trump announced in February that he would punish Mexico and Canada – to consider that they do not do enough against irregular migration and fentanyl traffic – with a 25%tariff, although it froze in March the application of this customs tax on the goods included in the commercial treaty sealed in 2020.
When on April 2 Trump announced what he called “reciprocal tariffs” that involved generalized rates of 10% and higher volumes for other regions and countries – such as China or the European Union (EU) – that export a lot to the US, Mexico and Canada were out of the list of punished countries.
With EFE information
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