Amid growing trade tensions and on the eve of the review of the United States-Mexico-Canada Agreement ( USMCA) , the Mexican automotive sector faces one of the most complex and, at the same time, decisive moments in its recent history.

During the conference “State of the Mexican Automotive Sector: USMCA, Tariffs and Statistics” , Alberto Bustamante , president of the National Agency of Suppliers of the Automotive Sector (Anapsa) , outlined a scenario in which US tariff pressure, the tightening of trade rules and, at the same time, a window of opportunity to consolidate Mexico as a global power converge.

The starting point was that Mexico is no longer a secondary player . With exports to more than 100 countries and a production of around 4.2 million vehicles per year, the country has consolidated its position as the second largest manufacturer in North America, surpassing Canada, whose market share has been steadily declining.

For Bustamante, this change is not a coincidence, but the direct result of trade integration since 1994.

“The only winner has been Mexico,” he stated.

However, the sector’s importance is not limited to production volume. The automotive industry accounts for approximately 22% of the country’s manufacturing employment and has built a supply network that provides over 900,000 direct jobs in auto parts.

This ecosystem not only supports the assembly plants, but also multiplies the economic impact, so that for every job in an assembly plant, multiple positions are generated in the supply chain.

The true weight of the sector is reflected in its trade balance. With a surplus of nearly $108 billion , the automotive industry surpasses, even combined, industries such as remittances, tourism, and oil.

This strength is largely explained by Mexico’s strategic role as a supplier of auto parts to the United States. Today, 43% of U.S. imports in this sector come from Mexico , an advantage that places the country well ahead of other partners like Canada.

This interdependence has generated a stark reality: no internal combustion engine vehicle in the United States can be manufactured without Mexican components.

Each unit produced in that country incorporates, on average, more than $10,000 worth of auto parts from Mexico .  But this very importance is what has placed the sector at the center of the trade dispute.

Heading towards the USMCA review

Ahead of the trade agreement review, the United States is seeking to tighten the rules of the game. The proposal includes raising the regional content requirement for vehicles from 75% to 85% , requiring that at least half of the components come directly from U.S. territory, and strengthening labor provisions.

This is in addition to a broader strategy aimed at reducing dependence on Asia, particularly China.

Meanwhile, the tariff environment has become more aggressive. Although the USMCA allows for exports with preferential rates, various measures implemented by Washington have resulted in tariffs of up to 25% for certain vehicles and components, especially those with high steel, aluminum, or copper content.

“The automotive sector is in the eye of the storm,” Bustamante warned.

Mexico, for its part, has begun to take measures following the same geopolitical logic. The imposition of tariffs of up to 50% on products from countries without trade agreements , particularly China, seeks to strengthen regional integration.

However, the industry has expressed concerns when these measures affect essential raw materials for manufacturing, such as plastic, which could increase the cost of local production.

In this context, the upcoming review of the USMCA, which will formally begin in July, is shaping up to be a turning point. Anapsa is calling for ensuring conditions of certainty and protecting the sector from unilateral measures.

Among the proposals, the signing of parallel agreements to protect the automotive industry from new tariffs stands out, as well as the strengthening of the rule of law and security, factors that directly affect competitiveness.

Despite the adverse environment, the diagnosis is not pessimistic; on the contrary, Bustamante anticipated that Mexico is heading towards a new stage of expansion.

In the coming years, the country could position itself as the world’s fourth largest producer of light vehicles and the third largest in auto parts, driven by greater regional integration and new investments, many of which, he assured, are already taking place, although with less public visibility.

“Turbulent times are coming,” he acknowledged.

But he also made it clear that the sector has built a solid enough foundation not only to withstand the strain, but to grow.

The Mexican automotive industry, which took more than two decades to consolidate, now faces its next big test: adapting to a more restrictive environment without losing its place as one of the country’s economic pillars and an indispensable partner for North America.

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Amid the review of the United States-Mexico-Canada Agreement (USMCA), tariff pressure, and the phenomenon of nearshoring (relocation of production lines), the North American automotive industry is undergoing a moment of structural redefinition. But beyond the automakers and investment announcements, there is a link that absorbs the first impact of any change: logistics

According to UPS , the transformation of the regional ecosystem has elevated the role of automotive logistics from an operational function to a strategic component of the business.

“Today, logistics is fully integrated with what is happening in the international environment. It is no longer just about moving merchandise; it is a strategic and fundamental part of the industry,” stated Gustavo Olvera, Head of Business Development and Key Accounts at UPS Mexico.

Mexico is part of the world’s largest trading bloc, and the relocation of companies has strengthened its role as a manufacturing hub . However, this integration also entails greater regulatory complexity.

The automotive industry, one of the most impacted by tariff discussions, faces an environment of rules of origin, trade reviews and regulatory adjustments that require more proactive management.

“When regulatory changes are announced, goods are already in transit. Inventories are already planned. Logistics is the first to be impacted,” Olvera explained.

In this sense, customs management, route adjustments, modification of transit times, and multimodal coordination become crucial to avoid disruptions in production.

Multiple cross-links and high integration

The complexity multiplies when you consider that a single automotive component can cross the border up to 17 times before becoming a finished vehicle.

This highly integrated model demands real-time visibility, customs coordination, and multimodal solutions that allow for cargo consolidation, inventory optimization, and risk mitigation in the face of contingencies.

“The industry requires high visibility and responsiveness. In an uncertain environment, having a reliable and experienced logistics partner is key to making strategic decisions,” Olvera stated.

On the other hand, the just-in-time model remains dominant in the industry, but now it coexists with a growing need for resilience.

Customs system migrations, additional inspections, or trade tensions are factors beyond the control of companies, but which directly affect operations.

Looking Ahead

Although the regulatory landscape continues to evolve, the fundamentals of the regional automotive industry remain strong.  The sector maintains year-over-year growth, generates millions of jobs, and is supported by a level of production integration that is difficult to replicate in other economic blocs

“We are part of the strongest economic bloc in the world. If we work in alignment, facing challenges with planning and collaboration, the growth trend should continue,” Olvera emphasized.

In the new North America, automotive logistics is no longer just operational support: it is the first line of defense against uncertainty.

The global automotive logistics market was valued at more than $22 billion in 2025 and is projected to reach $23 billion in 2026, steadily progressing to $41 billion in 2035, according to the consultancy Business Research Insights .

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Amid uncertainty over U.S. tariff policy, vehicle production in Mexico reached 326,069 units in April 2025, a 9.07% drop compared to the same month in 2024, the National Institute of Statistics and Geography (INEGI) reported Friday .

From January to April of this year , one million 299 thousand 554 automobiles were manufactured , which represented a variation of 0.9% compared to the same period in 2024, according to the Administrative Registry of the Light Vehicle Automotive Industry (RAIAVL) .

Of the total manufactured in the first four months of 2025, light trucks accounted for 76.6% , with  995,144 units , while the remainder corresponded to automobile production, with  304,410 cars .

Toyota  excelled in its domestic production during the reference period, with an  82.9% increase to  105,720 units compared to  57,790  in the same cycle in 2024.

KIA  also showed good results in terms of its manufacturing, with a  15.6% increase  in the first four months of 2025 with  91,810 units  compared to the  79,450  cars  produced in the same period last year.

Likewise, Ford had positive numbers in its production, with a rise of 10.2% reaching 141,237 units in January-April 2025 compared to the first four months of 2024, when it manufactured 128,188 vehicles .

Exports down

Exports of light vehicles manufactured in Mexico during April 2025 amounted to  256,953 units , representing a 10.88%  annual drop.

Year-to-date, shipments abroad also showed a decrease of  7.29% , with 1,032,819 cars exported , compared to 1,114,037  in the same period in 2024.

In January-April 2025,  the United States  was the main destination for light vehicle exports, with  81.4%  reaching  840,790 units , followed by  Canada  with  97,280  cars , which represented  9.4%  of shipments abroad.

Among the brands that registered the highest exports in the first four months of this year were Toyota, with an  87.8% increase over the same period in 2024, reaching 101,928 vehicles. KIA followed, with a 13.7% increase, exporting 67,730 cars abroad , and Ford, with a 7.2% increase , exporting 134,204 vehicles during the same period.

The United States remains the main buyer of vehicles manufactured in Mexico, despite the fact that US President Donald Trump has reiterated that he does not want cars manufactured in Mexico in his northern neighbor.

It’s worth remembering that a 25% tariff has been applied to imported cars from the United States since April 3rd , affecting Mexico and Canada, its main North American trading partners. However, Trump himself established some measures for vehicle manufacturers to ease the tariff burden, such as providing automakers with credits for up to  15% of the value of cars assembled in the United States.

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The caution of Mexican consumers when purchasing goods and services has affected the sale of light vehicles in the country, since in April 2025, 108,298 new units were placed on the domestic market, which meant a drop of 4.6% compared to the same month in 2024, according to data from the  Administrative Registry of the Automotive Industry of Light Vehicles (RAIAVL)  of the  National Institute of Statistics and Geography (Inegi) .

The agency also reported that during the January-April period of this year, vehicle sales reached 473,323 units , a 1.4% increase compared to the same period last year. According to INEGI records, this is the second-best January-April sales cycle in the last 10 years.

Nissan  with  17.9%  of the market, followed by  General Motors  with  13.6% ,  Volkswagen  with  11.6%  and  Toyota  with  8.3% , stood out among the brands with the best performance in the accumulated 2025 , revealed in their report the  Mexican Association of Automobile Distributors (AMDA)  and the  Mexican Association of the Automotive Industry (AMIA) .

Meanwhile, brands such as Honda , Hyundai , General Motors and KIA showed declines in their sales during April 2025, with decreases of 26.4%, 6.5%, 13.9% and 1% , respectively, compared to the sales of the same month last year.

As for  luxury brands , in the fourth month of the year  BMW registered a 17%  decrease in sales ,  Acura also had a 42.2%  drop and  Mercedes-Benz reported a 53%  drop compared to April 2024.

According to Grupo Financiero Monex , the  Mexican automotive industry faces a challenging environment following the imposition of  25% tariffs  on vehicles imported by the United States and manufactured in Mexico, which has resulted in mixed results for the sector in the first quarter of 2025.

In its  Sector Analysis: Automotive Industry , Monex indicated that this could impact the close interdependence of supply chains, particularly due to the slowdown in the  Mexican economy .

The financial institution’s report adds to the forecasts made by the Fitch Ratings agency , which changed its outlook for the global automotive sector from “neutral” to “deteriorated” for 2025, as it estimated that the  United States tariff measure will cause production cuts and increased costs .

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This, the rating agency stated, could put pressure on the profitability of automakers and their short-term free cash flow.

On April 3, the executive order signed by Donald Trump , President of the United States, on March 26, went into effect. This order imposes 25% tariffs on vehicles, light trucks, and auto parts imported into the United States.

According to Fitch Ratings , this measure represents a significant risk for automakers that import vehicles manufactured in Mexico, Canada, Japan, Korea, and Germany to the United States.

He also pointed out that the implications for suppliers of tariffs on auto parts are less transparent due to the complexities of the supply chain.

“In addition to rising costs, there are risks of delays and supply chain disruptions affecting U.S. auto manufacturing, similar to those in 2021-2022. However, this is temporarily mitigated by the delay of tariffs on auto parts that comply with the United States-Mexico-Canada Agreement (USMCA),” he added.

The agency also adjusted its U.S. vehicle sales projection for 2025 to 15.2 million units from a forecast of 16.3 million . For Europe, the adjustment was from 13 million to 12.5 million units .

“While we expect direct tariff implications to vary across automakers, depending on their production footprint, pricing, power, and supply chain configuration, no issuer will be entirely immune to declining consumer confidence and weaker auto demand,” Fitch emphasized.

Under that scenario, the rating agency expects automakers to raise prices worldwide to offset the U.S. tariffs, although the tariff implications for brands and models may vary.

“Some automakers may struggle to raise prices enough to cover the 25% tariff and will have to make painful adjustments to production and sales plans,” he added.

The firm estimated that suppliers and automakers could share the burden of higher tariffs. “Many suppliers will try to shift the costs of the tariffs to automakers, who will have to absorb most of them through price increases,” it emphasized.

Uncertainty related to tariffs could lead to fluctuations in production volumes, which could negatively impact the cash flows of suppliers dependent on automakers.

In response to the U.S.  tariffs on imported vehicles, the Mexican Automotive Industry Association (AMIA) , the  National Auto Parts Industry (INA) , and the  Mexican Automobile Distributors Association (AMDA)considered that this measure significantly harms the North American automotive industry.

80% of the vehicles that Mexico manufactures to send abroad are exported to the United States, so the 25% tariffs affect various automotive brands, including  General Motors (GM) which in 2024 exported 830,820 units , of which  711,582 were sent to its northern neighbor, as well as Ford which sent 358,366 units to the United States , according to figures from the National Institute of Statistics and Geography (Inegi) .

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In the United States, the cost of purchasing a new car has become more complicated simply because the vehicle has crossed the border. Starting April 3, 2025, this has become a reality for American consumers and automotive companies due to the 25% tariffs imposed by President Donald Trump on imported vehicles.

In an interview with T21 , Juan Francisco Torres Landa , leading partner of the international law firm Hogan Lovells , identified three scenarios that have this industry and several markets around the world in uncertainty.

On April 3, Trump’s tariffs targeting cars and auto parts not manufactured in the United States went into effect with the promise of “protecting” the American auto industry. However, for Torres Landa, the picture is more complex, as this issue has shades of the good, the bad, and the ugly, just like in a movie.

“The good thing is that we didn’t fall into the most adverse scenario, which could have been a complete implosion of the trinational trade relationship, and even have broad reciprocal tariffs, particularly in our case with the United States,” he emphasized.

According to the National Institute of Statistics and Geography (INEGI) , car production in Mexico reached four million units in 2024, of which 2.8 million were exported to the United States.

“The automotive industry accounts for a quarter to a third of total trade between Mexico and the United States. It’s no small feat,” the specialist noted.

Although the outlook for the automotive industry is not good, Torres Landa indicated that Mexico did not experience a complete implosion of the United States-Mexico-Canada Agreement (USMCA) .

As for the “bad” side , he pointed out that the 25% tariffs apply to non-US components, but “how do you calculate that for a car with 10,000 parts? Dissecting exactly how many parts come from the United States is much more difficult than a simple sum,” he explained, adding that as part of the uncertainty, companies like Stellantis have already taken measures to temporarily alleviate this blow, such as pausing their plants in Mexico “because it creates an existential problem when you don’t know how to calculate the origin of parts from the United States.”

For Torres Landa, the most worrying aspect is “the ugly side” : the violation of the USMCA. “The rules of origin are being violated. The United States unilaterally says that the pieces are not from North America, and that it’s not the percentage stipulated in the treaty, but rather the content they say is from the United States. This treaty, which Trump renegotiated and signed, now looks like a canvas he himself wants to erase,” he added.

Faced with this situation, the major automakers are not happy, he noted.

“Ford, GM, and Stellantis have been at the White House saying, ‘If this is to help us, they’re not helping us.’ The phrase “don’t help me, buddy” resonates with executives who see their supply chains collapsing,” said the leading partner at the international law firm Hogan Lovells.

The cost to the consumer: paying more

The American consumer will be the one to absorb the additional cost of the tariffs, the specialist explained.

The National Auto Parts Industry (INA) estimates that the average price of cars in the United States will increase by $3,000 , and there could be a possible reduction of one million units sold by 2025.

Given this, the tariffs are projected to cost American consumers more than $20 billion , affecting product availability and disrupting supply chains.

The specialist stressed that in this context, consumers in the northern neighbor could see the used vehicle market as an option .

“There’s a scramble for used cars, because it turns out it’s not a bad option to buy a used car in good condition before prices start to rise for these reasons,” he added.

According to the consulting firm Mordor Intelligence , the global used car market is expected to reach $460 billion , registering a CAGR of more than 10% in the period 2024-2029.

The USMCA, under early review

Although the official review of the USMCA is scheduled for 2026, this trade agreement “began to be reviewed on January 20,” the lawyer said, adding that Trump could seek bilateral treaties, breaking up the trilateral bloc, although Mexico and Canada would have to give in on issues such as migration or trade with China.

Regarding China, Torres Landa noted that North America will want to close its doors to the Asian country, although he pointed out that Chinese cars already account for 20-22% of the Mexican market.

If the USMCA is fully respected, “Mexico and Canada could be a privileged bloc compared to the rest of the world,” Torres Landa said. But under the current rules, “the margin of advantage is much smaller, so regional competitiveness hangs in the balance.”

“This doesn’t look like a good thing. A global recession is likely,” warned the expert, who noted that global trade could slow down with regions like the European Union and Asia responding with their own tariffs.

It is worth remembering that the Director General of the World Trade Organization (WTO) ,  Ngozi Okonjo-Iweala , expressed her concern about the tariffs implemented by  Trump , which, she warned, could cause a  1% contraction in the volumes of world merchandise trade in 2025 .

Faced with this uncertainty, the specialist hopes that logic will prevail.

“If logic prevailed, the United States would realize this isn’t working, but with Trump, things aren’t happening according to common sense,” he stressed.

This scenario forces Mexico to pay the price of being a “complete friend” of the United States, yielding on sensitive issues, or face the consequences of a bad decision.

Torres Landa indicated that, in Mexico, car prices could also increase if automakers pass on costs. “Luxury brands will be the most affected,” he indicated, citing Audi and Cadillac as examples of a direct impact.

Trump’s tariffs have thrown the automotive industry into a state of uncertainty, and for Torres Landa, the key is to return to the USMCA rules.

In response to the tariff imposition implemented by Trump, Mexican President Claudia Sheinbaum announced 18 actions on April 3 to accelerate Plan Mexico , aiming to boost the economy and national well-being. Among these actions, she highlighted the  strengthening and expansion of domestic vehicle manufacturing for the domestic market .

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El cargo The “good, the bad, and the ugly” of US vehicle tariffs apareció primero en T21.

The general director of the World Trade Organización (WTO) , Ngozi Okonjo-Iweala , expressed her concern about the tariffs implemented by Donald Trump , president of the United States, which, she warned, could cause a 1% contraction in the volumes of world merchandise trade in 2025 .

Okonjo-Iweala noted that this represents a downward revision of nearly four percentage points compared to previous projections.

“I am deeply concerned about this decline and the potential for it to escalate into a tariff war with a cycle of retaliatory measures leading to further declines in trade,” she stressed.

He warned that the recent announcements will have substantial implications for global trade and the prospects for economic growth.

In response, he noted that the WTO is analyzing the measure implemented by the U.S. president.

“The WTO Secretariat is closely monitoring and analyzing the measures announced by the United States on April 2, 2025,” he stressed.

Despite tariff measures, such as the imposition of a 25% tariff on vehicles imported by the United States, as well as reciprocal tariffs on several countries around the world, the vast majority of global trade continues to flow under the WTO’s Most Favored Nation (MFN) terms .

“Our estimates now indicate that this percentage currently stands at 74%, down from 80% at the beginning of the year. WTO members must stand united to safeguard these gains,” he urged, given the uncertainty generated by the United States’ tariff policy.

Ngozi Okonjo-Iweala said trade measures of that magnitude have the potential to create significant trade diversion effects.

In response, he urged WTO members to responsibly manage the resulting pressures to prevent trade tensions from escalating.

It’s worth remembering that on April 2 , Trump announced   a series of reciprocal global tariffs that will apply to products entering the United States from various countries around the world. He also maintains a  25% tariff  on vehicles imported into the United States.

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Following the April 2 announcement of reciprocal tariffs on several countries by US President Donald Trump , President Claudia Sheinbaum stressed that there are no additional tariffs on Mexico and noted that discussions are continuing with trade authorities in the United States.

At Thursday’s morning press conference, Sheinbaum emphasized that this was due to the good relationship that has been built between the two nations, which is based on respect.

“It has to do with the relationship we’ve built between the Mexican government and the United States, which is based on respect for Mexicans,” he emphasized.

However, the president noted that there are still two pending issues: tariffs on steel and aluminum, as well as those on the automotive industry.

“We are still in talks with the United States government regarding these issues, and work is continuing. The Secretary of Economy will most likely be in Washington next week,” Sheinbaum said.

He also reported that there will be a broad meeting this Thursday at noon, attended by business leaders, workers, and other sectors to accelerate the Mexico Plan .

He also pointed out that they will provide facilities for companies to enter the United States-Mexico-Canada Agreement (USMCA) , and added that exports within the Most Favored Nation could be reduced to a 12% tariff if the fight against fentanyl continues to yield results.

“Items that do not qualify as originating under the USMCA will be subject to a 12% ad valorem tariff rate,” Sheinbaum added, which, she emphasized, is part of the preferential treatment.

At the conference, he noted that vehicles exported from Mexico to the northern neighbor will be subject to a 25% tariff, except for parts manufactured in the United States. He added that they are seeking to negotiate this measure; “So far, all auto parts have the tax,” he emphasized.

He added that they have scenarios if the tax is not eliminated or lowered, but before announcing the plan, they will continue discussions with U.S. authorities.

Meanwhile, Marcelo Ebrard , head of the Ministry of Economy , said that a new trading system has been established in the world, but that the measures were not applied in the USMCA.

He asserted that the challenge now is for Mexico to achieve preferential treatment, with better conditions for competition.

“It’s a great achievement, as there wasn’t going to be an exception. This isn’t over yet; it’s a new chapter,” Ebrard emphasized.

The federal official stated that the goal over the next 40 days is to achieve the best conditions in the automotive sector, as well as in steel and aluminum.

On April 2 , Donald Trump announced a series of reciprocal global tariffs that will apply to products entering the United States from various countries around the world.

As part of this measure, a 10% tariff base was established for all goods entering the United States, and higher tariffs will be applied to imports from other countries.

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In response to the announcement that 25% tariffs on vehicles entering the United States from several countries around the world, including Mexico and Canada, will come into effect on April 2, President Claudia Sheinbaum said she will provide a comprehensive response by April 3 and is seeking a meeting with global automotive industry executives to define how her administration will act in this case.

“On April 3, we will be providing a comprehensive response to what Mexico will do in response to this situation, and that doesn’t mean we’re closing the door on working with the United States,” Sheinbaum said.

At her morning press conference Thursday, the president emphasized that the measure imposed by Trump includes an exception for Mexico and Canada, as it will only apply to non-U.S. parties .

He indicated that, as part of the negotiations his government is conducting, preferential treatment is being sought so that these tariffs do not affect the economy or jobs.

Sheinbaum pointed out that the 25% tax will impact the global automotive industry, although Mexico and Canada will have different conditions due to the United States-Mexico-Canada Agreement (USMCA) .

“Auto importers under the United States-Mexico-Canada agreement will be given the opportunity to certify their U.S. content, and systems will be implemented so that the 25% tariff only applies to the value of their non-U.S. content,” Sheinbaum explained.

Meanwhile, from Washington, United States, Marcelo Ebrard , head of the Ministry of Economy , indicated that six meetings have been held with the Secretary of Commerce of our northern neighbor, Howard Lutnick , and others with US authorities with the intention of seeking preferential treatment for Mexico, “so that we have the conditions to protect our jobs and the country’s economic activity.”

He noted that a complete response can be submitted starting April 2, “then, on that date, we’ll be able to provide more information and also tell them how we’re going to take advantage of the conditions provided for in the USMCA, such as the side letters for steel and aluminum and vehicle parts,” he said.

The federal official explained that vehicles manufactured in Mexico contain a high percentage of parts from the United States, which will allow them to access discounts .

“Those vehicles we’re exporting won’t have the 25% discount, but rather a discount, depending on the integration of the components I just explained,” he added.

He also detailed that another important point is the auto parts produced in Mexico , which he said will not be subject to the tariff as of April 2.

“We are at a meeting that was opened with the Secretary of Commerce to protect Mexican auto parts, which, as I said, represent 40% of all auto parts in the United States that are integrated into the entire U.S. production chain,” he said.

He explained that another issue that was also clarified in the meetings was that manufacturers in Mexico should not be charged multiple tariffs , “because as I once explained, a piston crosses the border seven times. Imagine if they were charged 25% seven times, then this has also been clearly established as not going to happen.”

He noted that these actions aim to ensure that products made in Mexico ultimately command the best price compared to any other country, such as Germany, Japan, South Korea, or other nations that also export to the United States. “That is the preference system the president has asked us to organize.”

As you may recall, Donald Trump announced on March 26th the imposition of  25% tariffs on vehicles entering the United States from several countries around the world, including Mexico and Canada, its main trading partners in North America, with the aim, according to him, of boosting the growth of the automotive sector in the United States. This measure will take effect on April 2nd .

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El cargo Sheinbaum expects a “comprehensive response” on vehicle tariffs until April 3. apareció primero en T21.