Us Reduces Tariffs on Mexican and Canadian Vehicles Under USMCA

The United States government has published a decree reducing tariffs on vehicles manufactured in Mexico and Canada. This action falls under the United States-Mexico-Canada Agreement (USMCA). The announcement was made by Marcelo Ebrard, head of the Ministry of Economy, at the Council of the Americas 2025 Annual Conference in Mexico. According to Ebrard, the United States Trade Representative (USTR) notified the publication of the decree. It establishes a reduction of between 40% and 50% in average tariffs for vehicles produced under the USMCA framework. The Mexican automotive industry is expected to benefit from this decree. The decree recognizes both U.S. components in vehicles manufactured in the region, and the assembly process. This means that work done in Mexico will be considered for preferential treatment. This measure may strengthen the competitiveness of vehicles produced in Mexico compared to markets facing higher tariffs. The decree is part of the trade policy decisions of Donald Trump's government. Trump's government has imposed tariffs on products from other countries. This preferential treatment seeks to reinforce production chains within the USMCA region and promote regional production. The Mexican government aimed to achieve this agreement during dialogues with U.S. authorities. Ebrard also noted that the formal review of the USMCA is expected to begin in the second half of 2025. This evaluation will determine how the treaty has functioned since its entry into force. It will also determine what adjustments might be necessary. During this process, other pending issues such as trade in steel, aluminum, tomatoes, and livestock will be addressed. With this tariff reduction, Mexico could increase its vehicle exports to the United States and Canada. This strengthens its integration into the regional value chain.