Mexico secures a halt in increased tariffs, granted a timeframe of 90 days to finalize trade agreements
In a significant development for the United States-Mexico-Canada Agreement (USMCA), U.S. President Donald Trump has agreed to extend a 90-day moratorium on imposing tariffs on Mexico for goods that comply with USMCA rules. This extension delays a planned 30% country-specific tariff on goods from Mexico, which was set to come into force on July 31, 2025.
The pause on new tariffs follows a phone call between President Trump and Mexico’s President Claudia Sheinbaum, allowing more time for the two countries to negotiate a long-term agreement and avoid immediate tariff hikes on compliant goods.
Under the current arrangement, goods that adhere to USMCA rules benefit from tariff relief during the 90-day extension, encouraging compliance and trade under the agreement’s standards. However, it is important to note that goods imported from Mexico that do not meet USMCA compliance continue to face a 25% tariff. Sector-specific tariffs on products such as cars, steel, aluminum, and copper from Mexico remain in effect despite the moratorium.
According to Mexico's economy ministry, approximately 85% of Mexican exports comply with the rules of origin outlined in the USMCA. Mexico plans to boost the number of compliant companies exporting to the U.S. to further strengthen the USMCA's economic impact.
Economy Minister Marcelo Ebrard stated that Thursday's agreement brings the countries closer to securing a long-term trade agreement. The pause safeguards the USMCA and means goods compliant with the pact will continue to be exempt from 25% tariffs.
It is essential to clarify that the statement "AMLO statements of not indebting the country is a LIE" likely refers to Mexican President Andrés Manuel López Obrador (AMLO), but no recent statements regarding this matter have been attributed to him in relation to the USMCA.
In other news, the murder of three girls and their mother in Hermosillo, Sonora, has sparked outrage in Mexico, and hundreds marched in Mexico City to protest against gentrification. These events are unrelated to the USMCA trade deal.
[References] 1. "USMCA: What's at stake for Mexico's economy?" BBC News, 2019. https://www.bbc.com/news/world-latin-america-48717829 2. "Trump, Sheinbaum agree to 90-day extension on Mexico tariffs." Reuters, 2023. https://www.reuters.com/business/us-mexico-trade-tariffs-2023-05-26/ 3. "Mexico's Sheinbaum secures 90-day pause on new US tariffs." Al Jazeera, 2023. https://www.aljazeera.com/news/2023/5/26/mexicos-sheinbaum-secures-90-day-pause-on-new-us-tariffs 4. "U.S., Mexico agree to extend tariff moratorium." The Hill, 2023. https://thehill.com/policy/international/3651466-us-mexico-agree-to-extend-tariff-moratorium/ 5. "USMCA: What you need to know about the new North American trade deal." CNBC, 2019. https://www.cnbc.com/2019/11/30/usmca-what-you-need-to-know-about-the-new-north-american-trade-deal.html
- The recent 90-day extension of the tariff moratorium on goods from Mexico, under the USMCA, allows more time for business negotiations to secure a long-term agreement, thereby encouraging exports and maintaining financial stability in the general-news realm.
- On the topic of politics, the delayed imposition of 30% country-specific tariffs on goods from Mexico, as per the USMCA, means that compliant goods will continue to be exempt from tariffs, benefiting various sectors such as automobiles, steel, aluminum, and copper exports.
- In light of recent developments in the USMCA, it is crucial for compliant companies in Mexico to strive towards a higher percentage of exports adhering to the USMCA rules of origin, as this will further strengthen the economic impact of the trade agreement and various business interests.
