Marcelo Ebrard , head of the Ministry of Economy (SE) , described the decision by the U.S. Customs and Border Protection (CBP) to eliminate tariffs and impose low-cost exports on auto parts manufactured in Mexico as an “important step forward. “
“Today, instructions were published for U.S. customs authorities, and they confirm, make explicit, and emphasize that auto parts from Mexico, as well as those from Canada, are treated under our treaty and therefore do not pay tariffs,” he emphasized.
The federal official indicated that under these terms, auto parts manufactured in the country will be treated as if they were from the United States for the purposes of the discounts and compensation that the automotive industry will apply in the coming weeks.
“Regarding auto parts, I would say that one of President (Claudia) Sheinbaum’s main concerns has been that Mexican auto parts be treated as provided for in our treaty with the United States and Canada. This means that they are not subject to tariffs or duties, and that we can continue exporting. It’s a very large industry in our country; it’s where we have the highest domestic content,” he stated during this Friday’s morning press conference.
Ebrard added that the measure was reached as part of the agreements in force in the Treaty between Mexico, the United States, and Canada (T-MEC) , and specified that the automotive industry depends on complex, cross-border supply chains, as a single vehicle may require various components that cross the border several times before final assembly.
The Secretary of Economy also highlighted the integration between Mexico and the United States in the automotive industry.
“The integration we have in the automotive industry involves several sectors. Basically, when you think about it, when you look at a vehicle, it has thousands of parts that aren’t necessarily produced by that company. That’s why they’re called assembly plants. They produce some parts, and everything else you get on the market from different types of companies. Who makes the screw, who makes the piston, and so on, all the way down to semiconductors. So, that universe, that ecosystem that surrounds each vehicle, has an increasing amount of Mexican content,” he noted.
He recalled that they have been working together for 35 years and noted that a treaty was signed in 2019 that requires increasing the content of Mexico, the United States, and Canada in vehicles manufactured in the region.
“There are millions of employees, and that’s what we’re working on. So, you can’t add 25% to auto parts, 25% to steel and aluminum derivatives, plus 25% to the final price, because you’ll destroy that company. So, well, you’ve already added 25%, so don’t add any more,” he added.
He asserted that this is the result of negotiations and good relations with his counterparts in the United States.
“In conclusion, I would say that at this point we understand each other perfectly, or much better, because we are now talking about a common basis, which is to protect this productive complex,” he said.
Meanwhile, Mexican President Claudia Sheinbaum indicated that auto parts exports represent a business valued at $70 billion annually, and welcomed the elimination of this tariff.
It’s worth remembering that on April 29, US President Donald Trump reportedly reached an agreement with vehicle manufacturers to “lighten” the 25% tariffs he imposed on cars and auto parts.
The U.S. president agreed to provide automakers with credits of up to 15% of the value of cars assembled in the United States, which could be applied to the value of imported parts, in order to allow time for supply chains to return to the United States.
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