By Brenda Cordova, Braumiller Law Group Mexico Legal Counsel
On April 3, 2025, during the presidential daily morning briefing, Mexico’s President Claudia Sheinbaum responded to the import tariffs announced the day before by President Trump, which targeted several countries. She emphasized that, of all the nations affected by these new duties, Mexico was the least impacted. She attributed this to the strong bilateral relationship between Mexico and the United States. She also reiterated that, since Mexico does not impose tariffs on U.S. goods, it is unfair for the U.S. to impose tariffs on Mexican products.
During the same presidential morning briefing, Mexico’s Economy Minister, Marcelo Ebrard, delivered a message explaining that the world is transitioning to a new commercial system and that the Most Favored Nation (MFN) duty under the World Trade Organization (WTO) is no longer applicable. He pointed out that, while the U.S. has 14 free trade agreements, the United States-Mexico-Canada Agreement (USMCA) is the only one that remains largely unaffected, with duties remaining at 0% on agricultural goods, electronics, machinery, chemicals, textiles, pharmaceuticals, medical products, and more. However, a 25% import duty applies to non-U.S. parts incorporated into automobiles, as well as to steel and aluminum products originating from Mexico.
Ebrard emphasized that the situation is still evolving, with ongoing dialogue and a 40-day negotiation period with the U.S. He also mentioned that Sheinbaum has been in communication with companies such as Mercedes-Benz, BMW, and Volkswagen, which expressed concern over the increased import duties but indicated a willingness to incorporate more USMCA-compliant products and explore ways to achieve this.
Ebrard further noted that one of Mexico’s competitive advantages is its strategic location near the U.S. He believes Mexico can negotiate favorable terms, as the automotive industry is integrated across different countries, whether the investment comes from Germany, Japan, South Korea, or elsewhere. Mexico is focused on improving conditions to protect jobs and strengthen its economy. Additionally, Mexico is committed to accelerating its plan and preparing for negotiations to review the USMCA. The goal is to secure the best possible conditions for Mexico’s automotive industry, steel and aluminum sectors, and non-USMCA industries.
Later, that same day Sheinbaum held a meeting with her cabinet, Mexican governors, legislators, and representatives from businesses, unions, and indigenous communities to discuss the accelerations of the actions under the “Mexico Plan”. During this meeting, President Sheinbaum presented a comprehensive strategy with 18 initiatives aimed at strengthening Mexico’s economy in response to the new U.S. tariffs. Key actions include increasing food and energy self-sufficiency, supporting domestic manufacturing, expanding housing and infrastructure projects, and boosting vehicle and pharmaceutical production. The plan also focuses on job creation, supporting regional economic hubs, assisting small businesses, and improving social welfare. Additionally, it aims to strengthen the local economy through public procurement reforms, scientific research, and raising the minimum wage. Most of these initiatives have specific dates for when they will be launched or completed.
In a subsequent daily briefing on April 7, 2025, Sheinbaum confirmed that Mexico’s current position is not to impose retaliatory tariffs, as this would disproportionately affect Mexican companies. This position contrasts with earlier statements made when President Trump first took office and threatened to impose a 25% import duty on all Mexican goods entering the U.S. At that time, Sheinbaum and Ebrard argued that such measures would harm regional economies, and in response MX could impose retaliatory tariffs resulting in an endless division of the North American Region.
From Sheinbaum’s and Ebrard’s statements, it is clear that the Mexican government is adopting a “wait and see” approach, ready to act depending on U.S. actions. Mexico has been preparing contingency plans, including Plan A, B, C, and D, for several months. While the specifics of these plans have not been fully disclosed, they are closely tied to broader national strategies such as the National Development Plan 2025-2030, the Master Plan, and the Mexico Plan, all of which aim to program, budget, and strengthen the economy through integration, shared prosperity, and tax collection.
Issues like fentanyl distribution, immigration, and security represent significant challenges for MX. From a trade and customs perspective, the main challenges the MX government faces are achieving preferential treatment for goods that meet the rules of origin under the USMCA and securing better conditions for international competition.
At the same time, businesses must fully understand the impact of tariffs on their operations and adapt their strategies accordingly. In light of these challenges, it is essential for companies to review various aspects of their operations. From a customs and trade perspective, they should ensure consistent and coherent information across all records, documents, and data related to the origin of materials and goods. The origin review should include, among others, the following:
- USMCA certificates issued by the companies involved,
- Identification of the HTS code of the goods imported into the U.S.,
- The cost and value of materials used to produce the finished goods for export to the U.S.,
- The purchase, shipping, and payment for materials imported into Mexico for producing finished goods,
- The purchase, cost, value, shipping, and payment for all materials, including indirect materials, used in the production of finished goods,
- The production process of the finished goods in the form in which they will be exported to the U.S.,
- Inventory management records for the materials used to the produce the finished good,
- A Bill of Materials, including at least the following information:
- HTS code and description/part number of the finished good
- HTS code of the materials
- Supplier’s name
- Unit price
- Quantity
- Unit of measurement
- Item code or identification code
- Country of origin
- Originating status of each material
Other factors businesses should consider are the terms and conditions of contracts and agreements with trading partners, as tariffs may impact on costs significantly. Companies should also be aware of whether specific INCOTERMs (International Commercial Terms) were negotiated and the potential consequences of those terms.
Although not all goods were impacted by President Trump’s tariffs, the ongoing dialogue between Mexico and the U.S. remains crucial, mainly for the automotive and steel and aluminum industries. Sheinbaum’s acceleration of Mexico’s strategy under the “Mexico Plan” is aimed at positioning the country more favorably in future negotiations. Still, Mexico’s primary challenge is to achieve preferential treatment, protect jobs, and secure better conditions for global competition.
The current environment is marked by uncertainty, which is not conducive to business stability. Mexico benefits from preferential treatment compared to other countries, and through continued dialogue and collaboration with the U.S.—especially on reducing fentanyl distribution and addressing immigration—better conditions can be achieved.
So far, U.S.-Mexico relations have remained respectful. However, Mexico must remain cautious and not rely solely on goodwill, as President Trump’s actions can be unpredictable. At this time, it is crucial for businesses in the trade industry to stay informed and regularly update their practices, particularly regarding the origin of goods exported from Mexico to the U.S. and contractual relationships with business partners, while also closely monitoring the evolving situation.
Disclaimer: This article is not intended to provide any legal advice; it is for informational purposes only. You should not rely on this to make a business decision.
