Mexican Exports Double USMCA Utilization Amid New US Tariffs

During the first 10 months of Donald Trump’s second administration, Mexican exports to the United States under the USMCA framework doubled. Data from the US Department of Commerce shows that the share of goods receiving preferential trade treatment climbed from 44.8% in January 2025 to 88.7% by November 2025. This growth remained consistent throughout the year but experienced a significant surge between June and July, where the percentage jumped from 47.6% to 86.1%.

This shift was primarily a response to US policy changes at the start of 2025, when the administration announced tariffs on Mexican goods that failed to meet specific rules of origin. To maintain tax-exempt status, Mexican exporters adjusted their supply chains to meet regional content requirements and expedited shipments to avoid scheduled tariff increases. In January 2025, only US$18.958 billion of the US$42.282 billion in total exports utilized USMCA. By November, the total export value reached US$44.575 billion, but the portion utilizing the treaty increased to US$39.541 billion.

USMCA: Trade Divergence

During 2025, North American trade dynamics shifted as Mexico and Canada responded differently to equivalent tariff pressures from the second Trump administration. Despite facing higher effective tariff rates, ranging from 3.8% to 4.7%, compared to Canada’s 1.8% to 3.7%, Mexico expanded its share of the US import market. 

Data from January through November 2025 shows that US purchases from Mexico rose 6% year-on-year to US$492.5 billion, while imports from Canada dropped 7% to US$351.2 billion. This divergence was largely shaped by structural differences in their respective export profiles and the strategic diplomatic paths taken by their governments.

The primary catalyst for this shift was the activation of tariffs under the International Emergency Economic Powers Act (IEEPA), tied to concerns over migration and fentanyl. To retain competitiveness, both nations aggressively leveraged the USMCA framework. 

Mexico’s compliance rate for preferential treatment surged from 45.1% in January to nearly 90% by October, and Canada achieved a similar increase. However, the composition of their exports led to unequal outcomes. Mexico, a hub for large-scale manufacturing, saw its advanced-technology exports jump by 47%, which effectively shielded its economy from a broader slowdown in the automotive sector. In contrast, Canada’s heavy reliance on energy and raw materials left it exposed; US imports of Canadian crude oil fell nearly 20% due to declining global prices, highlighting Canada's vulnerability to commodity cycles.

The political strategies of the two nations further deepened the divide. The administration of Mexican President Claudia Sheinbaum, with Minister of Economy Marcelo Ebrard, adopted a policy of technical coordination and de-escalation with Washington. This cooperative stance facilitated rapid supply chain adjustments and reinforced Mexico’s position as the United States' top trading partner. 

Conversely, Canada’s leadership under Prime Minister Mark Carney took a more confrontational approach, pushing back against the US trade agenda in several high-profile episodes. While Canada eventually stabilized its trade flow, the initial friction prompted many Canadian firms to hedge risks by building inventories rather than expanding market share. Ultimately, Mexico’s manufacturing integration and diplomatic pragmatism allowed it to navigate the 2025 trade environment with greater success than its northern neighbor.

USMCA’s Role and Regional Impact

Mexico has long been the United States’ largest trading partner in goods and services, reflecting decades of deep economic integration that began with NAFTA in 1994. Over this period, bilateral trade has grown nearly eightfold, making Mexico the second-largest US export market and a key investment destination.

USMCA, which replaced NAFTA in 2020, has reinforced this integration, supporting both trade and investment flows across North America. Since its implementation, intra-regional trade in goods and services has grown by 37%, driven largely by industrial supplies and the automotive sector. In 2024, Mexico maintained its position as the US’s top trading partner for the second consecutive year, with nearly US$930 billion in total trade, followed by Canada at US$903 billion. USMCA has also contributed to a 16% increase in foreign direct investment (FDI) in the region.

While the United States continues to be the primary destination for global FDI, attracting US$278 billion in 2024, Mexico drew US$36 billion, reflecting both the potential of nearshoring and ongoing structural challenges, including corruption, insecurity, weak rule of law, and water scarcity. These factors limit Mexico’s ability to fully capitalize on regional integration, according to analysis from CSIS.

Economic Outlook Shapes USMCA Review for Mexico

Analysts and officials from Mexico, the United States, and Canada agree that the July 2025 USMCA review should be seen not as a renegotiation, but as a structured evaluation aimed at modernizing regulations, reinforcing industrial integration, and maintaining a framework capable of generating shared economic benefits. This review takes on added significance as Mexico navigates regional economic slowdowns while seeking to leverage the USMCA to support nearshoring initiatives and broader trade stability.

According to Shelly Shetty, Global Head of Sovereign Ratings, Fitch Ratings, Mexico faces a constrained growth environment alongside persistent fiscal pressures. Fitch forecasts that the country will remain below its potential growth, amid a regional context characterized by a general economic slowdown and reduced investment levels. While Latin America as a whole shows gradual improvement in sovereign ratings, Mexico remains among the least dynamic economies in the region.

Regional growth is expected to average around 2.5%, yet Mexico continues to sit at the lower end of the spectrum alongside Bolivia. This reflects weak investment and the absence of structural reforms necessary to boost productivity, limiting the country’s capacity to fully capitalize on regional integration opportunities.

On the fiscal side, Fitch acknowledges some progress in post-pandemic consolidation, but key challenges remain. The budget deficit remains elevated, and public debt continues to rise, in part due to ongoing financial support for PEMEX, which Fitch identifies as a central factor in Mexico’s credit assessment. Shetty emphasized that fiscal consolidation has relied heavily on curbing investment spending rather than increasing structural revenue, leaving Mexico’s macroeconomic outlook constrained as it enters 2026.