Experts agreed that the U.S. tariffs

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.”

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In light of the possible imposition of 25% tariffs on Mexico by the government of US President Donald Trump, the Mexican Association of Freight Forwarders (Amacarga) considered it necessary to apply trade protection measures to national companies.

Juan Pablo Pacheco, president of the organization, commented that there are various options that could be applied to respond to unilateral actions, “there would be the possibility that the Mexican government would grant tax breaks to national companies to replace imports.”

He also mentioned that there is an option to diversify markets and stop sourcing some American products to strengthen acquisitions from countries in Latin America, Europe and Asia.

He considered that January 30 and 31 will be crucial for the country to exhaust all avenues of negotiation and prevent the United States government from resorting to a unilateral decision that would harm the relationship between the two countries and “could lead to a trade war in which we would all lose.”

“If tariffs are applied to our exports unilaterally and for political reasons on February 1, we will have to think about the various options that the USMCA allows us and consider everything from applying mirror measures to resorting to Article 31 regarding dispute resolution or even appealing to the World Trade Organization. Everything will depend on what is announced,” he said.

It is worth remembering that the 450 freight agents affiliated with Amacarga move 85 thousand tons of industrial supplies and more than two million containers per year through the main ports of Manzanillo , Veracruz and Salina Cruz.

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In 2023, the production value of manufacturing industries in Mexico reached 10.78 trillion pesos , which represented a decrease of 2.1% compared to 2022, announced the National Institute of Statistics and Geography (Inegi) .

According to the Annual Survey of the Manufacturing Industry (EAIM) , the subsectors with the greatest decrease in that year were petroleum products with 26.6% , basic metal industries with 15.5% , wood with 9.9% , textile input manufacturing with 9.6% , and the chemical industry with 9.5 percent .

Meanwhile, the sectors with the greatest growth were printing and related industries with 9.4% , manufacturing of transport equipment with 5.5% , non-metallic mineral-based products with 4.5% , food industry with 2.9% and manufacturing of computer equipment with 2.8 percent .

According to the agency, net sales of products manufactured in the manufacturing industry sector in 2023 represented the main concept within the income from the supply of goods and services, contributing 90.7% , followed by income from maquila with 8.5% and other income from the supply of goods and services, with 0.8 percent .

The industries that represented the largest share of net sales of manufactured products in relation to income from the supply of goods and services were: petroleum products with 99.7%, beverage and tobacco industries with 99.2%, food with 98%, chemicals with 97.6%, and paper with 97.3 percent.

On the other hand, the subsectors with the highest share of maquila revenues compared to revenues from the supply of goods and services were the manufacturing of computer equipment with 71.3% and other manufacturing industries with 62 percent .

In turn, production machinery and equipment , as well as real estate , represented the most important fixed assets in the manufacturing industry sector; both accounted for more than 92% of the total for this item for the period 2021-2023.

The Annual Survey of the Manufacturing Industry showed negative annual variations in five of its main variables, where personnel employed and hours worked each decreased by 0.6% compared to 2022. The indicator of the value of manufactured products also showed the same behavior , with a decrease of 2.1% compared to 2022.

Expenditures on consumption of goods and services registered a decrease of 1.9% , and income from the supply of goods and services reported a fall of 1.6% over 2022. The only variable with growth was the value of total fixed assets , with an increase of 1.7 percent .

In the run-up to the review of the Treaty between Mexico, the United States and Canada (T-MEC) , which will take place in 2026, various indicators, some of which are part of this survey, will be part of the dialogue of the regional trade agreement, so it is important to monitor them, a task in which the Cuarto de Junto participates , which is a mechanism that will analyze specific aspects of the T-MEC, such as  market access and rules of origin , as well as the one referring to the labor issue , among others.

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In November 2024, the National Producer Price Index (INPP) in the transportation and logistics sector in Mexico reported a slight increase, according to information issued this Monday by the National Institute of Statistics and Geography (Inegi) .

In this regard, the agency detailed that, in the eleventh month of the year, prices in the transport, mail and storage industry showed the most significant increase in tertiary activities with 1.37% at a monthly rate and 7.74% annually.

On the other hand, Inegi announced that the INPP aims to measure the variations in the prices of goods and services produced at a national level, and noted that in that month, the INPP, including oil, had a monthly growth rate of 0.93% and 6.38% annually.

By group of economic activities, the primary sector was the one that showed the greatest increase in prices for producers. On a monthly basis, the prices of primary activities, which involve agriculture, mining and fishing, increased by 2.45% in the aforementioned month.

In turn, secondary activities , which include those related to manufacturing, industries and construction, increased 0.99% in the eleventh month of 2024.

The above was the result of price increases in the mining, generation, transmission and distribution of electric energy, supply of water and gas through pipelines to the final consumer, construction, and manufacturing industries sectors, the organization highlighted.

According to Inegi, tertiary activities , which involve transportation, commerce, education, tourism and health, had an increase of 0.56% in the aforementioned period.

Meanwhile, the Index of Intermediate Goods and Services , including oil, rose 0.95% on a monthly basis and 6.24% on an annual basis. In the reference month, the Index of Final Goods and Services , including oil, increased 0.93% on a monthly basis and 6.44% on an annual basis.

These figures take on relevance in the context of the upcoming review of the United States-Mexico-Canada Agreement (USMCA) , which will take place in 2026, since several of the industries reported in this report will be part of the trilateral dialogue.

Since his campaign for the presidency of the United States, Donald Trump , who will take office in January 2025, has threatened to impose 25% tariffs on certain products of Mexican origin, which would affect one of the most important productive sectors for our country, such as the automotive sector, which is beginning to recover pre-pandemic levels both in manufacturing and in sales and exports.

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In the fourth quarter of 2024, global merchandise trade continued to grow at a moderate pace, with container shipping being the indicator that improved the most, although possible changes in policies in this area project an “uncertain” outlook for 2025, revealed the Merchandise Trade Barometer published by the World Trade Organization (WTO) .

The indicator, which provides real-time information on the trajectory of merchandise trade in relation to recent trends, stood, according to its most recent reading, at 102.7 points , i.e. above the quarterly trade volume index.

According to the WTO, barometer values ​​greater than 100 indicate an upward trend, while values ​​below 100 suggest that merchandise trade has fallen below trend or will do so in the near future.

In this regard, the agency indicated that all the component indices of the barometer remain within the trend or above it, with the exception of the electronic components index, which had 95.4 points in said period .

In contrast, the index for container shipping showed the greatest improvement, reaching 105.8 points . This was followed by automotive products with 104 points , and air freight transport with 102.9 points .

The container shipping index showed the biggest improvement over the past three months, while the air freight index lost momentum. Export orders, which are typically the most predictive of the barometer’s components, remain very close to the reference value of 100, the WTO said.

Meanwhile, the section on export orders and trade in raw materials and agricultural products had an index of 100.5 points in the aforementioned period.

According to the latest WTO forecasts, trade volume growth in 2024 is expected to be 2.7% , while growth in 2025 is expected to be 3% .

The latest forecast showed modest changes globally compared to the previous forecast in April. Exports from Asian economies and imports from North American countries grew faster than expected in the first half of 2024. Meanwhile, European trade flows continued to decline in both export and import sectors, the barometer showed.

Despite growth in most indicators, the WTO warned that there could be some changes in trade policy, including possible tariff conflicts between the United States and some of its partners by 2025.

In this regard, the  United Nations Conference on Trade and Development (UNCTAD) also foresees an uncertain environment for the following year, despite having projected a record for world trade of 33 trillion dollars in 2024.

It is worth remembering that the president-elect of the United States, Donald Trump , has threatened Mexico and Canada with imposing 25% tariffs , which puts at risk the review of the trade agreement between these three countries, known as the Treaty between Mexico, the United States and Canada (T-MEC)  for 2026.

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Zero hour is approaching. On November 5th, it will be decided who will govern for the next four years in the United States, Mexico’s main trading partner.

This is a turning point for the southern neighbor as candidates Kamala Harris and Donald Trump have opposing views on the United States-Mexico-Canada Agreement (USMCA).

Harris supports a review of the treaty with a view to optimizing its form rather than its substance, while Trump is in favor of renegotiation .

While the coin is in the air and considering the importance that the automotive industry represents for the North American region, this year the T-MEC Seal initiative emerged, promoted by the National Agency of Automotive Sector Suppliers (Anapsa) , which seeks to support compliance with the regional content value , which offers legal certainty not only to companies, but to the governments of the three countries.

To date, more than 320 companies involved in the automotive industry value chain, both domestic and American, already have the T-MEC Seal. Likewise, there are a good number of companies that are waiting for the review of the requirements to join and not only receive the seal, but also become part of the Registry of Trustworthy Companies in the North American Automotive Sector, which is shared with Tier 1 companies in Mexico, the United States, and Canada.

Being part of the registry also enables preferential treatment at Mexican customs and at the United States Customs and Border Protection (CBP); another advantage is that the T-MEC Seal coexists perfectly with the Customs Trade Partnership Against Terrorism (CTPAT) and Authorized Economic Operator (AEO).

The acceptance and advantages that the T-MEC Seal provides to companies has stimulated other sectors to show interest in this process , such as the steel, aluminum, plastics, molds and machinery industries.

“One of the concerns of the United States government is precisely the investments in Mexico by Chinese companies and in this sense what the seal does is give them certainty that the regional content values ​​are from North America,” said Alberto Bustamante, general director of Anapsa, in an interview with T21.

In this regard, Bustamante explained that the T-MEC Seal is intended to be part of the proposals put on the table in the review of the treaty in the three countries, for which it will be presented to the Business Coordinating Council (CCE) .

It should be noted that to date, 50% of the companies that have approached Anapsa to obtain the T-MEC Seal do not comply with the regional content value . Bustamante explained that the agency is responsible for advising companies to comply with all the requirements.

“Since the entry into force of the USMCA, the raw materials that were imported from Korea and China began to be replaced, for example, steel. Today, the cost has been leveled and steel from the region has already begun to be consumed. However, what has not changed, at least until now, are the chips and some electronic components that we continue to import from Asia. However, even with this, we manage to meet the 75% regional content value requirement,” said the general director of Anapsa .

The medium-term goal is for these elements to be manufactured in the North American region. 

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The National Association of Importers and Exporters of Mexico (ANIERM) announced that for the next review of the United States-Mexico-Canada Agreement (USMCA), they will request the creation of a regional industrial policy, necessary in response to the impact of relocation.

José Gerardo Tajonar Castro, president of the organization, emphasized that this policy should include resources for developing the export capacity of small and medium-sized enterprises (SMEs), similar to efforts seen in the United States regarding chip production.

“We believe the solution lies in regional cooperation and the implementation of industrial policies that support businesses, offering us opportunities to enhance efficiency not only in products but also in services. Mexico supplies 13.6% of U.S. merchandise purchases but only 5% of its imports; the relocation of investments presents an opportunity to narrow this gap,” he stated during a meeting organized by the Mexican Association of Intermodal Transport (AMTI).

He explained that their proposed strategy addresses not only products but also services to effectively respond to nearshoring, formerly known as export maquiladoras.

Furthermore, ANIERM anticipates benefits from established port-to-port routes between Mexico and the U.S., international maritime highways, short-sea shipping routes, cabotage, among others.

“We’ve observed that the Progreso to Panama City route in Florida has been highly successful, providing us with entry into the U.S. from an alternative route. This benefits not just business but also various distributors, offering us the option of intermodal transport and access to different routes along the U.S. East Coast and short-sea shipping routes to Central America,” he noted.

Tajonar Castro stressed the importance of collaborating closely with Claudia Sheinbaum’s administration in the upcoming term, asserting, “It’s crucial for our foreign trade that her proposals are considered. Historically, we’ve seen a government that acknowledges our proposals but fails to implement them.”

“We need to work closely with the cabinet and new officials. We face ongoing challenges; every week, we find ourselves needing to write to the Ministry of Economy. However, our contribution includes initiatives like training military personnel near operations in tariff classification or customs operations, through scholarships. Our goal is not just to complain but to offer solutions, such as teaching military personnel to identify and mitigate risks, in collaboration with ANAM. Unfortunately, the cost of training and operational delays are making commercial facilitation difficult, which is our reality,” he explained.

During the event, ANIERM and AMTI signed an agreement to promote the benefits of intermodal transport, highlighting reduced costs, eco-friendly transportation, enhanced security, and capacity.

“We must work diligently to educate ANIERM’s importers and exporters about the advantages of intermodal transport. Our first step is to educate their partners so they understand what intermodal transport entails and how it can economically benefit their cargo movements. We share the common goal of improving import and export operations,” said Diego Anchustegui, president of AMTI.

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