Experts agreed that the U.S. tariffs violate the U.S.-Mexico-Canada Agreement (USMCA). New products are expected to be subject to tariffs in April, which will have a ripple effect on various industries .
John Willy, president of the Latin American Confederation of Customs Agents (CLAA), stated that the atmosphere is one of uncertainty and concern, and the potential impact could be a domino effect.
“Initially, they were applied to products like aluminum and steel, but they have had a domino effect on various industries. Uncertainty in trade policy has also led to a decline in foreign investment, which is extremely serious, affecting importers and exporters that depend on inputs and raw materials. For example, the automotive sector, where companies like Ford have had to adjust their operations, resulting in plant relocations and job cuts. The uncertainty has led to increased production costs that will eventually be passed on to consumers,” he explained.
During the Tariff Threat on the Horizon (USMCA) webinar , he argued that the automotive sector will be the most affected , as the tariffs will impact both parts and finished vehicles, as an increase in costs could lead to higher final prices.
For the agricultural industry , there are products that will affect exports to the United States, but also the competitiveness of imported goods. In addition to crops such as avocados and tomatoes, which have already suffered from a drop in demand.
Meanwhile, manufacturing will also be affected, as it depends on imported inputs and will be forced to seek alternative suppliers, leading to “additional risk in costs and delivery times.”
“More industries are affected: energy, medicine, and in general, all of them. But we need to mitigate the impact so this doesn’t impact us as much. An important issue is how supply chains and trade routes will change at the logistical level. We know that tariffs are forcing companies to reconsider their supply chains. Many are hiring new suppliers from other countries to avoid tariffs, and others are moving their production to countries like Vietnam or Brazil. New sea and air routes are also being explored to minimize costs. This not only affects companies but also impacts logistical infrastructure, which needs to adapt to these new dynamics,” he added.
Raquel Saed, a USMCA expert and professor at the Universidad Iberoamericana, believes that if the U.S. government’s actions don’t end the treaty due to its violation of its own, it would have to be renegotiated next year.
Under this scenario, he explained that it is necessary to implement strategies to mitigate the impact, such as diversifying suppliers, optimizing production line costs, investing in technology, and securing legal counsel.
“The threat of tariffs under the USMCA is having a significant impact on Mexican foreign trade. It’s crucial that all of us—customs brokers, everyone—stay informed and adapt to the changes. Together, we will find solutions to continue promoting foreign trade,” he asserted.
He added that Donald Trump has all the power to do “whatever he wants, but there’s also an impact on the states. This is going to take a long time; it’s not clear how he’s going to implement these tariffs; there’s still a long way to go.”
For his part, Oscar Rueda, a lawyer specializing in foreign trade and customs, explained that the unilateral imposition of tariffs undermines not only the free trade agreement but also the rule of international law.
“These actions not only violate a treaty between three countries, but also undermine the rule of law and undermine international treaties because they remain flawed. This means that, despite the existence of legal texts, we now see that nations can violate them without any punitive sanctions. We have a direct impact on the Mexico-United States-Canada Free Trade Agreement itself. One of its main objectives is to eliminate tariffs between nations, and imposing tariffs violates the agreement,” he noted.
In this regard, he reiterated that a series of violations of free trade agreements have been recorded in the world order, so Mexico can initiate various dispute resolution mechanisms established in the treaty itself or before the World Trade Organization (WTO), “our government should begin the processes before the WTO, and if we want to have a retaliatory measure, a tariff war is not the answer, but we have intellectual property, migration, foreign investment or benefits in the financial system.”
Comment and follow us on X:@evandeltoro / @GrupoT21
