Overview: Mexico’s Trade Exposure to the U.S.
Mexico’s economy is heavily intertwined with the United States through trade. The U.S. is the destination for over 80% of Mexico’s exports, making Mexico one of the countries most vulnerable to U.S. tariff policies. In fact, Mexico recently became the United States’ top trading partner, surpassing China and Canada.
Trade accounts for roughly 73% of Mexico’s GDP and about 83% of Mexico’s exports go to the U.S. Such reliance means any broad U.S. tariffs threaten Mexico’s economic stability. Conversely, if Mexico is exempted from tariffs imposed on other countries, it can gain a competitive edge. This high exposure set the stage for Mexico’s intense focus on the U.S. tariff actions in
Timeline of 2025 Tariff Announcements & Impacts on Mexico
In early 2025, the U.S. imposed sweeping tariffs on Mexican imports, triggering economic and diplomatic tension. Initially set at 25%, with 10% for energy, the tariffs prompted President Sheinbaum to pursue negotiations over retaliation. By March, the U.S. partially exempted USMCA-compliant goods, preserving key trade flows. Further sector-specific tariffs followed, especially on autos, but Mexico secured carve-outs for compliant exports. On April 2, the U.S. announced global tariffs—excluding Mexico—safeguarding most of its exports. The peso and markets rallied, and Sheinbaum praised diplomatic efforts. Talks continue to address sensitive sectors and ensure stability ahead of USMCA’s 2026 review.
Sectors Under Tariff Threat
Auto Manufacturing: The auto sector is Mexico’s top export earner, with $158 billion in vehicle and parts exports in 2023—76% of which went to the U.S. A sweeping 25% U.S. tariff threatened to disrupt this tightly integrated cross-border trade. Early signs of strain appeared when Stellantis paused production at a Mexican plant, citing supply chain uncertainty. In the final deal, USMCA-compliant autos largely avoided tariffs—but only the U.S.-made portion is fully exempt. That means Mexican content could still face duties, adding pressure on automakers operating in Mexico.
Agriculture: U.S. tariffs posed a major risk to Mexican agriculture, but most of the sector was spared. Mexico supplies a large share of U.S. food imports—63% of vegetables and 47% of fruits and nuts. In 2022 alone, the U.S. imported around $44 billion worth of Mexican agricultural goods like avocados, tomatoes, berries, beef, and tequila. A 25% tariff could’ve hit demand and raised U.S. food prices sharply. Thankfully, under USMCA, most farm exports remain tariff-free. Still, the sector remains vulnerable to future trade tensions, especially through non-tariff barriers like sanitary rules.
Textiles and Apparel: Mexico’s textile sector, though smaller than autos or electronics, plays a key role in exports and employment. It mainly supplies clothing and fabrics to U.S. brands under USMCA, which ensures duty-free access. A 25% U.S. tariff would have hurt competitiveness, risking order shifts to Asia or higher costs for U.S. buyers. Fortunately, textiles were exempt under USMCA. Still, Mexican firms must meet strict “yarn-forward” rules to retain this benefit. The government is expected to support the sector through training and incentives, recognizing its vulnerability to tariffs and importance for jobs.