- Mexico seeks to avoid 25% tariffs on steel and aluminum exports set for March 2025.
- Construction costs could rise 4% if tariffs take effect, with automotive sector also vulnerable.
- Temporary suspensions granted for USMCA goods until April 2025 as talks continue.
Tariff Talks Escalate
Mexico is locked in urgent negotiations with US trade officials to prevent sweeping Section 232 tariffs that would eliminate its current exemption status. The proposed 25% duties—up from 10% on aluminum—threaten to disrupt North American supply chains just as manufacturers adapt to USMCA rules.
"We are in talks because there is no reason for these tariffs," Economy Minister Marcelo Ebrard told reporters after emergency meetings with US counterparts. His team highlights that over half of Mexico's exports already flow through USMCA channels, with compliance rates potentially reaching 90% in coming weeks.
Sector-Specific Fallout
Industry analysts warn the tariffs could add 4% to Mexican construction costs, with housing starts particularly vulnerable. The automotive sector—where temporary tariff suspensions remain in place through April—faces complex compliance hurdles. "We're working closely with companies struggling to meet USMCA rules," acknowledged a senior trade official speaking anonymously.
Market watchers note the temporary reprieves suggest both sides want to avoid economic damage. "The suspensions give breathing room," said a Mexico City-based trade attorney, "but the clock is ticking on permanent solutions."