Ebrard: US content in Mexico-assembled vehicles cuts export tariffs by 40%

Economy Minister Marcelo Ebrard said Tuesday that vehicles assembled successful Mexico volition look an mean tariff of 15% erstwhile exported to the United States, importantly little than the 25% work the U.S. applies to astir different overseas cars.

“It’s a precise large vantage compared to different countries that export to the United States,” Ebrard said astatine an lawsuit successful Mexico City.

“Of course, we would emotion it to beryllium zero,” helium added.

His remarks came the aforesaid time that the United States Department of Commerce published the “Procedures for Submissions” by importers of automobiles that suffice for preferential attraction nether the USMCA, the North American escaped commercialized pact that superseded NAFTA successful 2020.

United States President Donald Trump announced successful precocious March that helium would enforce a 25% tariff “on each cars that are not made successful the United States,” but U.S. contented successful vehicles assembled successful Mexico was exempted from the duty, lowering the effectual tariff connected vehicles made successful Mexico. The tariff took effect successful aboriginal April.

The “procedures” published by the U.S. Department of Commerce successful the Federal Register item what importers of vehicles from Mexico and Canada request to bash to beryllium exempt from paying a tariff connected the U.S. contented successful those vehicles (see below).

Ebrard: Tariff ‘discount’ could beryllium arsenic precocious arsenic 50%

Ebrard said that vehicles assembled successful Mexico are eligible for a “discount” connected the 25% tariff announced by Trump successful precocious March.

Economy Minister Marcelo Ebrard has led Mexico’s commercialized negotiations with the United States, traveling to Washington connected repeated occasions to contiguous the Mexican government’s lawsuit against auto, alloy and aluminum tariffs. (Daniel Augusto/Cuartoscuro)

He said that the “discount” would beryllium 40%, connected average, but could beryllium arsenic precocious arsenic 50% — if a conveyance has 50% U.S. content.

Guillermo Rosales, president of the Mexican Association of Automotive Distributors, said successful March that a conveyance made successful Mexico for export to the United States has, connected average, 40% U.S. content. The effectual tariff connected a conveyance assembled successful Mexico with 40% U.S. contented is 15%.

In the announcement it published connected Tuesday, the U.S. Commerce Department said it was making “the presumption that the approximate magnitude of U.S. content” successful vehicles made successful Mexico and exported to the U.S. “is adjacent to 40 percent of the worth of the vehicle.”

Thus, Ebrard said that the mean tariff connected vehicles made successful Mexico and exported to the United States volition beryllium 15%.

If a car assembled successful Mexico has 50% U.S. content, it volition look an effectual tariff complaint of 12.5% erstwhile shipped to the United States. A Mexican-made car with lone 30% U.S. contented volition look a 17.5% U.S. tariff.

Ebrard said that the preferential attraction afforded to Mexico is the effect of the predominant meetings betwixt Mexican officials and U.S. officials, including Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.

“You tin ideate what would hap without … [this treatment],” helium said, referring to the economical harm a afloat 25% tariff would inflict connected Mexico’s car sector, which exported much than 2.6 cardinal cars to the United States past year, according to U.S. data.

New US tariff strategy gives Mexico’s car manufacture ‘an further comparative advantage,’ says Sheinbaum

Ebrard has led Mexico’s commercialized negotiations with the United States, traveling to Washington connected repeated occasions to contiguous the Mexican government’s lawsuit against auto, alloy and aluminum tariffs.

Mexican car parts that comply with the USMCA are exempt from 25% duties imposed by the U.S connected imports from astir different countries successful aboriginal May.

The National Auto Parts Industry reported earlier this period that 92% of the Mexican car parts assemblage volition not beryllium taxable to the 25% U.S. tariff arsenic astir each manufacturing complies with existent commercialized rules.

Importers of Mexican vehicles indispensable taxable documentation to debar afloat tariff 

According to the “Procedures for Submissions by Importers of Automobiles Qualifying for Preferential Tariff Treatment Under the USMCA To Determine U.S. Content,” lone vehicles imported to the U.S. from Mexico and Canada whitethorn beryllium recovered to beryllium eligible to use the 25% tariff “exclusively to the worth of the non-U.S. contented of the automobile.”

As of Tuesday May 20, importers of Mexican vehicles seeking preferential attraction connected the U.S. contented successful the automobiles “may taxable documentation, connected a exemplary enactment basis, identifying the benignant and worth of U.S. contented attributable to each exemplary enactment imported into the United States,” according to the Commerce Department announcement successful the Federal Register.

Their documentation volition beryllium reviewed “for completeness and compliance” by the Commerce Department, the announcement said.

If a submission is deemed to beryllium successful order, an importer won’t beryllium required to wage the 25% tariff connected the U.S. contented connected vehicles they are bringing into the United States.

The Commerce Department announcement said that the commerce caput “may retroactively widen this [preferential] attraction to qualifying exemplary lines for vehicles imported connected oregon aft April 3, 2025, astatine his discretion,” meaning that importers could beryllium partially reimbursed for tariffs they person already paid.

The announcement said that if Customs and Border Protection “determines that the declared U.S. contented is overstated oregon inconsistent with a U.S. contented fig approved by the Secretary, the [full] 25 percent tariff volition use retroactively (from April 3, 2025, to the day of the inaccurate overstatement) and prospectively.”

Ebrard said helium considered the Commerce Department announcement to beryllium “very positive,” fixed that it establishes “preferential attraction for the car manufacture successful Mexico and Canada.”

‘For galore companies, the tariff volition proceed being adjacent to 25%’ 

While Ebrard celebrated the preferential car tariff attraction afforded to Mexico by the United States, the president of Global Alliance Solutions, an planetary commercialized services institution that specializes successful Mexico-U.S. customs brokerage, highlighted that not each vehicles made successful Mexico volition suffice for a 15% tariff complaint erstwhile shipped to the U.S.

Adrián González said that portion U.S. automakers specified arsenic Ford and General Motors mightiness person 40% (or higher) U.S. contented successful the vehicles they marque successful Mexico, Japanese and German manufacturers bash not.

Therefore, “for galore companies, the tariff volition proceed being adjacent to 25%,” helium said.

Volkswagen, Toyota and Nissan are among the non-U.S. automakers that person plants successful Mexico.

Under USMCA rules — and earlier Trump imposed the caller car tariff — a conveyance could participate the United States tariff-free provided astatine slightest 75% of the worth of its contented was from North America, i.e. Mexico, the U.S. and Canada.

González highlighted that the United States has agreed to chopped its car tariff connected vehicles from the United Kingdom to 10% for 100,000 cars a year, and asserted that “Mexico should aspire to thing similar, oregon adjacent propulsion for zero fixed the economical integration with the United States.”

With reports from Reforma, El Economista, El Financiero, Reuters, López-Dóriga Digital and La Jornada