US Delays Tariffs, But Auto Industry Fears Long-Term Impact

The United States granted a 90-day extension to delay the implementation of a 30% tariff on Mexican goods, originally scheduled to take effect on Aug. 1, 2025. While the Mexican government welcomed the extension, key stakeholders in the automotive industry expressed growing concern about the long-term outlook for regional economic integration and the viability of continued investment.

The temporary suspension was announced on July 31, 2025, amid ongoing bilateral negotiations between the two countries. However, tariffs of 25% remain in place for vehicles that do not comply with USMCA rules of origin, and 50% tariffs continue to apply to Mexican steel, aluminum, and copper exports. These measures reflect a broader shift in US trade policy under President Donald Trump, who has recently negotiated separate tariff agreements with Japan, Indonesia, and the European Union, while imposing punitive actions against Brazil and Canada.

“This is the highest tariff ever proposed on Mexican products since Trump’s return to the White House. It undermines the protection we believed we had under the USMCA, which was founded on regional integration and content value,” said Rogelio Garza, President, Mexican Automotive Industry Association (AMIA) in an interview with Expansión. 

The atmosphere of uncertainty is reshaping how automakers assess North America. “We are facing an earthquake. The rules are changing drastically, undermining a structure that took over three decades to build,” said Guillermo Rosales, President, Mexican Association of Automotive Distributors (AMDA), to Expansión.

While negotiations with the United States remain open-ended, other global competitors such as the European Union already operate under defined tariff frameworks and commitments with the United States, placing Mexico at a disadvantage.

Despite pressure on trade relations, Mexico’s macroeconomic indicators have shown resilience. According to the latest edition of CIAL Insights from data analytics firm CIAL Dun & Bradstreet, Mexico’s GDP grew 1.2% year-over-year in 2Q25, driven by a 1.7% expansion in services and a 4.5% increase in primary sector activities.

Exports rose 10.6% year-over-year in June 2025, totaling US$54.0 billion. Manufactured goods, accounting for over 90% of exports, led the surge with a 13.5% increase. This helped reduce the trade deficit from US$18.5 billion in 2024 to US$6.2 billion by mid-2025.

In contrast, imports showed minimal growth of 0.2% during the first half of the year, largely due to slowing domestic demand and a continued decline in fixed investment. Imports of capital goods have now fallen for six consecutive months.

Bank credit expanded 4.1% in real annual terms in June 2025, with a slowdown in the commercial lending segment. Nonetheless, non-performing loans remained stable at 2.0%, suggesting no immediate financial instability.