Mexico has recently celebrated its success in avoiding additional tariffs from the United States amid a broader trade campaign aimed at multiple countries worldwide. President Claudia Sheinbaum credited the robust free-trade agreement established between Mexico, Canada, and the U.S. during Donald Trump’s presidency as a protective measure for Mexico’s economy. Moving forward, her administration plans to address the existing 25 per cent tariffs imposed on American imports of automobiles, steel, and aluminium. This strategy includes ramping up domestic production to protect jobs and decrease reliance on foreign imports.
In a recent statement, Sheinbaum recalled her discussions with Trump, expressing her belief that Mexico would not face reciprocal tariffs due to its lack of tariffs on U.S. products. Economy Secretary Marcelo Ebrard highlighted that while free-trade agreements are in place with the U.S., several countries were affected by Trump’s newly announced tariffs, which he termed “Liberation Day,” emphasizing their intention to revive U.S. manufacturing jobs.
Ebrard noted that Mexico successfully dodged these tariffs, allowing a variety of its exports, such as avocados, electronics, and apparel, to continue entering the U.S. market tariff-free. Sheinbaum encouraged local businesses that have yet to export under the trade agreement to meet the necessary qualifications. This may involve updating documentation or altering product sourcing. However, the uncertainty created by these tariffs is felt throughout Mexico, particularly within the interconnected North American automotive supply chain.
Stellantis, which produces popular brands including Dodge, has announced a temporary halt in operations at its Toluca assembly plant while it evaluates the situation’s impacts. A similar pause is also planned for its Canadian facility, resulting in around 900 temporary layoffs across its U.S. plants. This ambiguity is prompting Sheinbaum to advocate for “Plan Mexico,” which aims to boost domestic production capabilities.
A significant focus of this initiative includes a partnership involving local universities and Mexican firms, such as Megaflux and Dina, to manufacture electric buses. These buses, called Taruk—a term derived from the Indigenous Yaqui language—are already in production, with a goal to deliver 200 units by the year’s end. Notably, approximately 70% of the Taruk’s components are sourced locally, although lithium batteries remain imported from China.
Creating robust domestic production capabilities for public transport is vital, especially considering that a third of Mexico’s population relies on public transport daily. Megaflux’s director noted that despite the global economic uncertainties associated with tariffs, Mexico’s substantial internal market positions it advantageously to navigate these challenges and potentially thrive in the domestic manufacturing landscape.