Trump's Policies to Impact Mexico's Auto and Aerospace Sectors

During his inauguration speech on Jan. 20, 2025, President Donald Trump reaffirmed several key policies, particularly impacting the automotive and aerospace industries. These policies have significant implications not only for the United States but also for key trade partners like Mexico.

Automotive Sector Policies

Trump reiterated his commitment to reshoring car manufacturing to the United States, stating: "We will bring car manufacturing back to the United States at a pace that no one could have imagined just a few years ago."

This goal poses challenges for Mexico, a major hub for vehicle assembly, especially for SUVs and pickup trucks highly sought after in the U.S. market. Additionally, Trump announced plans to revoke policies favoring electric vehicles (EVs), arguing that traditional combustion engine models should remain competitive. This policy shift could disrupt Mexico’s growing EV production sector, which aligns with global trends, and potentially pressure manufacturers to focus more on combustion-engine vehicles.

"With my actions today, we will put an end to the Green New Deal, and we will revoke the electric vehicle mandate, saving our automotive industry and keeping my plants sacred for our great American auto workers," Trump stated.

A proposed 25% tariff on imports from Mexico and Canada could significantly impact both US and Mexican consumers. For example, SUVs and pickups priced between US$30,000 and US$40,000 might see increases of up to US$3,000, directly affecting middle-class Americans who rely on these vehicles for work and agriculture, particularly in states like Arizona and New Mexico.

Experts like Odracir Barquera, Director, AMIA, suggest that if Mexico retaliates, it would likely target more sensitive US products rather than vehicles. Gerardo Gómez of JD Power added that American consumers would ultimately bear the brunt of these tariffs, potentially reducing demand for Mexican-made vehicles. The Mexican automotive industry is closely coordinating with the government, particularly with the upcoming T-MEC review, which could lead to further negotiations.

Aerospace Industry Vision

Trump also emphasized ambitions in the aerospace sector, highlighting plans to expand US leadership in space exploration. "We will pursue our manifest destiny to the stars, watching American astronauts plant the stars and stripes on the planet Mars," he proclaimed.

This renewed focus could indirectly benefit Mexico, a key supplier of aerospace components, by increasing demand for technology and parts. However, Mexico faces the challenge of competing in a market that prioritizes advanced research and development.