Navigating Trade Wars: Perspectives from Mexico (Part 1)

In part one of this two-part installment in Clyde and Co’s Navigating Trade Wars series, Mexican-based Partners Enrique Garza and Roger Rodriguez, outline recent developments in U.S. tariff policy affecting Mexican exports, including temporary suspensions, sector-specific exemptions, and broader trade measures introduced in early 2025. They also explore the implications for the United States-Mexico-Canada-Agreement (USMCA).

From early 2025, there have been significant developments regarding tariffs on Mexican products, driven largely by the evolving geopolitical landscape and ongoing trade tensions.  

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Tariff Tensions

On February 1, 2025, U.S. President Donald Trump issued an Executive Order imposing an additional 25% ad valorem tariff on products from Mexico and Canada. This measure was introduced as part of the U.S.'s efforts to address the ongoing immigration and public health crises.

Mexican President Claudia Sheinbaum took proactive measures and confirmed that, in exchange for deploying 10,000 National Guard personnel to the U.S.-Mexico border (to combat illegal immigration and the drug crisis), the U.S. would temporarily suspend the 25% tariff for one month, until March 4, 2025.

On March 4, 2025, the temporary suspension of tariffs expired, but following further diplomatic discussions, the U.S. government granted a 30-day extension on the introduction of the proposed 25% tariff. However, the extension only applied to products that complied with the United States-Mexico-Canada Agreement (“USMCA”). Valid until April 2, 2025, the exemption covered approximately 50% of Mexican exports to the U.S., primarily in the automotive and agricultural sectors.

Evolving Trade Measures and Sectoral Impact

On March 12, 2025, the U.S. reinstated Section 232 tariffs on steel and aluminum imports from all countries, including their commercial allies, Mexico and Canada. Specifically, a 25% ad valorem tariff was imposed on steel articles, and a 25% ad valorem tariff on aluminum articles and their derivatives. These measures were implemented to address national security concerns relating to the importation of these materials.

On April 2, 2025, the U.S. government announced a broad package of new tariffs targeting a wide range of countries as part of its updated trade agenda. The measures referred to informally as "reciprocal tariffs," included a general 10% ad valorem duty on most imports, with elevated rates for various countries not deemed as offering fair trade treatment (further detail can be found within our tariff tracker).

On April 3, 2025, Mexican President Claudia Sheinbaum publicly confirmed that Mexico would not be subject to any additional U.S. tariffs under the new measures announced the previous day. She emphasized that the exemption reflected the strong bilateral relationship and ongoing cooperation between the two governments, particularly in matters of border security and compliance with the USMCA.

US Policy Adjustments and Clarifications

On April 29, 2025, the White House issued a presidential decree clarifying that tariffs imposed under various provisions, such as those concerning national security or economic emergencies would no longer be applied cumulatively. Prior to this measure, certain products, especially automotive components containing both steel and aluminum, had been subject to overlapping 25% tariffs under multiple customs provisions. Under the new instruction, only one applicable tariff would be imposed, thereby easing exporters’ financial burden. Exceptions remain in place for goods not covered under Proclamation 10908 and those composed of multiple targeted materials. The U.S. Customs and Border Protection agency (CBP) further announced that these changes would apply retroactively to March 4, 2025, allowing importers to obtain refunds for any excess duties paid.

USMCA Uncertainty and Strategic Outlook

In early May 2025, questions arose around the future of the USMCA following public remarks by President Donald Trump suggesting the treaty should be reviewed or potentially terminated. Trump alleged that Mexico and Canada had not fully complied with their obligations under the agreement, prompting speculation about a possible renegotiation.

In response, Mexican President Claudia Sheinbaum reaffirmed Mexico’s firm commitment to the USMCA, emphasizing that the agreement has been mutually beneficial and remains a cornerstone of regional economic integration. She clarified that while a formal review of the treaty is scheduled for 2026, neither the U.S. government nor any of its officials have formally proposed terminating or renegotiating the agreement. President Sheinbaum added that Mexico continues to maintain a positive and constructive dialogue with U.S. authorities.

Conclusion

In light of the evolving situation, Mexican exporters are strongly encouraged to maintain close monitoring of U.S. regulatory changes and optimize their supply chains to ensure their international trading strategy is USMCA compliant.

In part two, we will continue our analysis of ongoing Mexican trade disputes, particularly with the U.S. and Ecuador; highlighting new tariffs, diplomatic tensions, and the economic risks facing Mexico’s export-driven economy.

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