On March 4th, the US-Mexico border was stagnant. The truck Thor Salayandia had planned to send it over the checkpoint to the US was sitting in the lot. What was moving was the chaos in the air.
Sarayandia owns and operates a factory in Juarez, Mexico, manufactures auto parts and trucks metal tubes into a warehouse in the Texas Legislature in the US. Over the past month, his business has been thrown into turbulent waters.
“It’s becoming a political game… so for two days, traffic has dropped significantly. Even US officials didn’t know if they’d charge a cross-section trailer,” he said. “There’s a lot of play…it’s misinformation, confusion, uncertainty. There’s a lot of unknowns. It’s about how tariffs are introduced, how they fit, how they’re charged.”
US President Donald Trump’s complicated tariff policies have left major industries scrambled between Mexico and the United States to agriculture, textiles, and textiles, and scrambled to adhere to their future.
On March 26, Trump announced a new 25% tariff on car and car parts, which will take effect on April 3. Tariffs force Sarayandia to cut its labor force. He is beginning to think about alternative location options for the factory.
“Politicians of the past have seen a globalized world in which things were manufactured in low-cost countries… But now with the arrival of Trump, who has another economic vision of the world, manufacturers are beginning to think about changing the way things are produced,” Sarayandia said.
On March 4th, when his truck was stuck at the border, a 25% tariff was set to enforce goods imported from Mexico. However, as the Mexican business community waited breathlessly to see if President Claudia Sinbaum could get out of order, Trump announced that he was counted in the USMCA (US-Mexico-Canada Agreement, or T-MEC is known in Spanish, as T-MEC is known in Spanish).
The new rules were not a complete relief sigh for Mexican business leaders. Mexico says an atmosphere of uncertainty is ongoing as it is T-MEC compliant and worried about its policy to go down the pipeline.
Mexican politicians quickly pointed out that Mexican pesos are fairly stable between 20 and 21 pesos.
Mexico’s Economic Secretary Marcelo Ebrard said he will work with the Goliath Automotive industry in particular to meet 90% of exports within the guidelines of the T-MEC contract. But it can take months to complete. Now, with the new auto-centric tariffs announced last week, all of these efforts could have been in vain.
“What we’re looking for is a priority for Mexico so that we can protect our country’s employment and economic activity,” Ebrard said at a press conference on March 27.
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Approximately 40% of the auto parts used in vehicles sold in the US were manufactured across the borders of Mexican cities, where the economy relies on automobile factories. The Mexican automotive industry generates more than $100 million with annual revenues and more than 3 million cars, primarily heading towards the US.
Alberto Bustamante, director of the National Agency for Automotive Industry Providers in Mexico, said tariffs affect the automotive industry in a variety of ways, depending on whether the company exports parts or the entire assembled vehicle. It also includes more philosophical questions, such as “what makes up a car.”
“As the private sector, we don’t have any options. If it had depended on us, we would have already understood that, but it’s not depended on us, it depends on the government,” Bustamante said. “In the US, if these tariffs are in effect and 1 million people come into effect in Mexico, five million jobs are in danger.”
He said that as Trump places a 25% tariff on items made of metal kicked on March 12, special and luxurious vehicles with unusual parts will be the most affected by current tariffs and fees made of steel and aluminum.
Because of how difficult and time consuming to meet T-MEC guidelines, affected businesses need to decide whether it is worth paying 25% tax, or whether they should shop in Mexico and move their business elsewhere.
Rather than focusing on current turbulence, Sheinbaum is turning to reforms in the T-MEC trading to ensure the long-term stability of the Mexican economy. However, she will not have the opportunity until the agreement is reviewed in 2026. If Trump implements tariffs on the auto industry on April 3, Mexico will respond with anti-opposition.
In the meantime, Bustamante said the automakers are beginning to rethink their 10-year plans and are considering either abandoning Mexico as a manufacturing hub or moving their gaze away as a major market from the US.
It’s not just products with status in Purgatory. Other products, from washing machines to peanuts to medical devices, also vary in degrees of adaptation to T-MEC trade contracts.
Avocados (an industry of around $3 billion and a pride in Mexican cuisine) may not always fit T-MEC, depending on the harvest and hygiene processes used by certain companies. Mexico sends over £1 billion of avocados to the US each year, and tariffs can boost prices for popular fruits to ensure Mexican avocado producers are in a hurry to comply with T-MEC regulations.
“Our plan is to open up a new market,” said Eleazar Oceguera, director of the Association of Avocado Producers and Exporters in Jalisco. “If there’s a problem, you need an alternative. You can’t concentrate on another market.”
Both Oceguera and Bustamante said the actual costs will come to American consumers as thousands of products become more expensive and the price of the car increases by thousands of dollars per vehicle.
The atmosphere of uncertainty is also widespread in industries that fully comply with T-MEC guidelines as Trump considers applying drastic tariffs. Such a scenario would cause the Mexican economy to recession and the US economy would face price increases.
“We always advocate for Mexican companies. That’s part of our fundamental work,” Sinbaum said on March 27th.