Mexico's US auto exports to benefit from tariff discounts, minister says

MEXICO CITY: Mexican Economy Minister Marcelo Ebrard said on Tuesday that cars assembled in Mexico and exported to the United States will face an average tariff of 15%, not 25%, citing additional discounts that local products benefit from.

AI Brief

Mexico and Canada can get tariff discounts under USMCA if they prove US parts content in exported cars.
Trump's 25 pct auto tariff applies only to non-US parts if certified, easing impact on North American carmakers.
US Customs can retroactively impose full tariffs if companies misstate US content in their vehicles.

"It's a very big advantage compared to other countries that export to the United States. Of course, we would love it to be zero," Ebrard said at an event.

A spokesperson for the economy ministry said the discounts applied to exports that comply with the regional U.S.-Mexico-Canada Agreement (USMCA).

The government of U.S. President Donald Trump announced on March 26 that it would effectively charge a 25% tariff on all cars not made in the country. This went into effect early last month.

However, carmakers from Mexico and Canada, which are part of a North American free trade agreement with the United States, can apply for preferential discounts, Ebrard told journalists at the event.

Under the agreement, importers can reduce the tariff by certifying how much of each vehicle is made with U.S. parts.

If approved by the U.S. Department of Commerce, the 25% tariff would apply only to the non-U.S. portion of the vehicle, rather than its full value.

The process requires certification from officers in the company applying for a tariff reduction and is valid for six months.

If U.S. Customs find that companies over-stated the U.S. content of autos in their declarations, they may apply the full 25% tariff retroactively.

Mexico is a major assembler and exporter of cars to the United States.

The Trump administration had faced pressure from automakers to soften the blow of its wide-ranging import taxes.