Mexico’s government said that as much as 90% of exports to the US could benefit from the tariff relief deal the two nations reached Thursday, significantly reducing the risks to a slowing economy that is heavily dependent on trade with its northern neighbor.
US President Donald Trump exempted Mexican and Canadian goods covered by the North American trade deal known as the USMCA from 25% tariffs until April 2.
That relief will apply to more than half of Mexico’s exports to the US, and companies using a different exemption called the “most-favored nation” rate will be able to access that benefit quickly and easily before April, Economy Minister Marcelo Ebrard said Friday.
“We estimate that they will account for around 85% to 90% of Mexico’s foreign trade with the US by April,” Ebrard said alongside President Claudia Sheinbaum at her daily morning press conference.
Trump agreed to the tariff relief after speaking to Sheinbaum on Thursday, just days after the levies had gone into effect. Sheinbaum told reporters after the call that she highlighted her government’s efforts to help stem the flow of illegal drugs across the US border, saying Mexico had made progress in meeting Trump’s demands. She also warned Trump that Mexico would have had no choice but take retaliatory measures if the tariffs remained in place.
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Ebrard said Mexican officials will meet with counterparts from the US Trade Representative’s office next week to continue negotiations. He said Trump’s proposed duties on steel and aluminum wouldn’t be justified because Mexico imports more of the metals from the US than the US imports from Mexico.
Mexico will start working with companies, mainly in the automotive industry, that will not benefit from the tariff relief deal, Ebrard said.
Exports from those companies to the US account for between 10% and 12% of the total, he said, adding that Mexico’s government will “see what measures we take” after meeting with their representatives.
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About 49% of US imports from Mexico were exempt from duties under the USMCA last year, according to a Bloomberg Economics analysis of US Census Bureau trade data. Another 41% of imports have until Trump’s latest order entered with minimal duties under the so-called “most-favored nation” rate, without having to apply under the USMCA.
If those goods are no longer allowed to trade under preferential rates, providers may look to switch to compliance with the USMCA to avoid the 25% tariffs. At the very least, 10% of goods Mexico exports to the US will be subject to Trump’s tariffs, according to Bloomberg Economics.
