On the Dash:
- Tariff negotiations could influence future vehicle production, sourcing and inventory across North America.
- Automakers may continue shifting manufacturing plans until long-term USMCA rules become clearer.
- Dealers should monitor the July 20 talks for potential impacts on vehicle availability, pricing and supply chains.
Mexico is planning to ask the U.S. to eliminate tariffs on automobiles, steel, and aluminum during the United States-Mexico-Canada Agreement (USMCA) review scheduled for July 20. President Claudia Sheinbaum’s administration submitted a 13-point trade agenda aimed at restoring certainty for manufacturers and preventing future unilateral trade actions.
Economy Secretary Marcelo Ebrard leads the negotiations after resolving several outstanding trade issues with Washington. Notably, the U.S. declined to renew the USMCA for another 16-year term, a decision that now subjects the agreement to annual reviews through 2036.
Uncertainty continues
Automakers and suppliers continue to face uncertainty as tariff risks and changing trade rules complicate long-term investment decisions. Mexico is also seeking stronger economic security provisions and clearer rules of origin to bolster North American manufacturing.
Toyota’s decision to move some Tacoma production from Mexico to Texas by 2030 illustrates how trade uncertainty is already influencing manufacturing strategies. Mexican officials warn that prolonged tariffs could slow future automotive investment even if production remains in the country. Industry observers note that uncertainty itself, beyond tariffs alone, is becoming a crucial factor in production planning.
Competing priorities
Mexico wants tariffs removed and stronger protections against unilateral trade measures. The U.S. is expected to push for stricter rules of origin, stronger supply chain security, and policies that reduce its trade deficit with Mexico. Negotiators will likely seek compromises that preserve North America’s integrated manufacturing network while addressing U.S. economic and national security concerns.
In May, Mexico exported a record $54 billion in goods to the U.S., a 17.5% year-over-year increase, underscoring the continued strength of cross-border commerce.
Analysts say the deep integration of North American supply chains makes a complete collapse of the USMCA unlikely, though ongoing uncertainty could continue to delay investment. Mexico and Canada are also coordinating their trade and investment strategies as they prepare for future USMCA reviews.
