Mexico's Tariff Treatment Is Unchanged Despite New US Duty

Mexico's Economy Ministry confirmed that the 10% Section 301 tariff the United States imposed on July 24, 2026 does not change Mexico's trade treatment, since it merely replaces an equivalent Section 122 duty that already applied to non-USMCA-compliant goods. More than 80% of Mexican exports remain exempt under the treaty, though the measure underscores mounting US use of Section 301 authority against Mexico amid the ongoing USMCA joint review. The outcome affects exporters, manufacturers, and cross-border supply chains as both governments prepare for a fourth negotiating round in September covering steel, aluminum, and strategic sectors.

Mexico's Economy Ministry said the new 10% tariff the United States announced under Section 301 of its 1974 Trade Act does not alter the trade treatment Mexico receives, since that same rate had already applied to goods failing to meet USMCA rules of origin under Section 122. The US measure, which took effect July 24 and covers 60 trading partners, replaces the temporary global 10% tariff that expired after 150 days in force.

At the close of the third round of bilateral talks on the USMCA review with US Trade Representative Jamieson Greer, Economy Minister Marcelo Ebrard explained that Mexican exports compliant with the treaty, more than 80% of the total, will remain exempt from the new duty. "Ther is no change there," the official said, adding that for what does apply to Mexico, "it is the same thing we had, only the legal basis changes." The ministry said in a statement that Washington had previously informed the Mexican delegation it would replace Section 122 tariffs with duties grounded in Section 301, as part of a broader overhaul of its global trade policy.

Ebrard stressed that the decision had already been communicated to Mexico by the Office of the US Trade Representative (USTR) and does not shift the country's position in the USMCA review, a matter he said was relayed to President Claudia Sheinbaum that same July 23. 

An Investigation Mexico Has Been Fighting Since March

The tariff announcement is not an isolated event but the outcome of a process the White House launched in March. USTR opened a Section 301 investigation on March 12 targeting 60 economies that together account for more than 99% of US imports, and determined that Mexico, along with Canada, the European Union, Ecuador, Indonesia and Pakistan, was among the countries with forced-labor import bans on the books that go unenforced, earning it the lower 10% rate versus the 12.5% applied to 46 other economies.

Since the measure was first proposed, the Mexican government has pushed an active defense aimed at securing a full exemption. Business groups including the Business Coordinating Council (CCE), Concamin and Index submitted a document directly to Greer requesting Mexico's complete exclusion from the investigation, arguing no evidence supported the allegations. On July 7, delegations from Mexico, Peru, Guatemala and Ecuador appeared before USTR hearings to formally request exemptions, at a time when Mexican exporters already face roughly US$22.988 billion in annual tariffs to the United States, Mexico Business News reported.

The pushback has not been limited to the affected governments. Twenty-two Democratic state attorneys general in the United States filed formal objections in early July, characterizing the proposal as broad-based tariffs in disguise and an overreach of Section 301 authority. Trade analysts have separately framed the investigation as part of a broader US strategy to rebuild the legal footing for near-universal tariffs after earlier measures, imposed under emergency economic powers, were struck down by the Supreme Court.

That defense leaned on a precedent Mexico sought to repeat: when "reciprocal" tariffs were introduced last year, USMCA-covered goods were exempted and duties fell only on trade moving outside the treaty,  an outcome the country tried to replicate this round. The same outlet had reported as early as June that roughly 85% of Mexico's export volume to the United States would qualify for the USMCA exemption, while sectors already subject to Section 232 tariffs, automobiles, steel and aluminum, would likewise be excluded from the new duty, though they continue to pay rates of up to 50%.

The Global Backdrop: 60 Countries, Limited Exemptions and Widespread Criticism

Globally, the tariff measure covers 99.4% of US imports, with exemptions for products such as oil, gas, fertilizers, aircraft and critical minerals. Countries including the United Kingdom, Switzerland and the European Union noted that Washington honored the tariff caps set in their existing trade agreements, while China, Australia and Brazil called the measure unjustified. Canada, which faces a separate front over US$20 billion in goods tariffed as of July 27, responded more cautiously, with Minister Dominic LeBlanc reiterating his government's willingness to keep engaging constructively with Washington.

For Mexico, the immediate takeaway is continuity rather than disruption: the tariff Washington now demands under Section 301 is, in practice, the same 10% that non-USMCA-compliant products were already paying under Section 122, just under a new legal basis. The deeper question, however, remains open heading into September, when the fourth round of negotiations will need to determine whether that preferential treatment holds as the broader treaty review moves forward.