EXPLAINER - What does the US import from Mexico and how will tariffs impact consumers?

Record ID: 1954654

  • Title: EXPLAINER - What does the US import from Mexico and how will tariffs impact consumers?
  • Date: 31st January 2025
  • Summary: PERIBAN, MICHOACAN, MEXICO (RECENT - JANUARY 17, 2025) (REUTERS) VARIOUS OF AVOCADO PACKING PLANT
  • Embargoed: 14th February 2025 13:07
  • Keywords: Claudia Sheinbaum Donald Trump MEXICO United States exports imports industry sanctions tariffs trade
  • Location: VARIOUS LOCATIONS, MEXICO
  • City: VARIOUS LOCATIONS, MEXICO
  • Country: Mexico
  • Topics: South America / Central America,North America,Government/Politics,International Trade
  • Reuters ID: LVA004764530012025RP1
  • Aspect Ratio: 16:9
  • Story Text: If U.S. President Donald Trump follows through on his pledge to slap a 25% duty on imports from Canada and Mexico, it could usher in a volatile new chapter in the longstanding trade relationship with impacts trickling down to consumers.
    Mexico, in particular, is one of the biggest trade partners of the U.S., representing 15.8% of total trade. The U.S. imported more than $475 billion worth of Mexican products in 2023, a figure that has nearly doubled over the last decade, census data showed. U.S. exports to Mexico also accounted for more than $322 billion.
    With this heavy mutual reliance- and Trump's threat to seemingly violate the U.S.-Mexico-Canada free trade pact- ho will consumers be impacted by new tariffs?
    WHY DID TRUMP IMPOSE THE TARIFFS?
    New tariffs on imported goods -even Canada and Mexico which are partners in the United States-Mexico-Canada Agreement (USMCA)- emerged as a campaign trail pledge by Trump to protect American industry and push policy demands. His promises ranged from a universal tariff on foreign-imported goods to tariffs higher than 200% on vehicles imported from Mexico.
    Trump vowed to create the External Revenue Service, a government body "to collect tariffs, duties, and all revenue" from foreign sources, adding that Americans had for too long been taxed by the Internal Revenue Service (IRS) and that it was time for those who benefit from trade to start paying "their fair share."
    In the case of Mexico, Trump has used the threat of tariffs to pressure the administration of President Claudia Sheinbaum to crack down on migration and fentanyl trafficking.
    HOW HAS MEXICO RESPONDED TO THE THREATS?
    Sheinbaum and high-ranking officials in her administration have suggested potential retaliation to Trump's tariffs with a set of their own on U.S. imports and warned that such tit-for-tat actions would amount to enormous economic losses for both countries.
    More recently, though, Sheinbaum has publicly doubted that Trump will follow through on his pledge to impose the tariffs on February 1.
    Sheinbaum has defended Mexico's willingness to stem the flow of migrants arriving at the U.S. border and help fight the fentanyl epidemic in the U.S., but has also said that criminal groups in Mexico are receiving guns illegally from the U.S.
    WHAT WILL HAPPEN TO THE GOODS THE U.S. IMPORTS FROM MEXICO?
    The largest sector by far to be impacted by new tariffs would be autos and auto parts, which accounted for $129 billion in imports in 2023. The supply chains of the three members of the USMCA are heavy intertwined. Mexico and Canada account for more than 50% of all auto parts exported to the United States.
    New tariffs are expected to pressure the bottom line of major U.S. automakers that have plants in Mexico, like General Motors, ultimately raising prices of SUVs and pickup trucks for U.S. consumers.
    The next biggest categories to be impacted include electric machinery and a wide range of parts and equipment, like motors and generators, and fuel and crude oil.
    Beverages and spirits like tequila, mezcal and beer also make up a substantial portion of U.S. imports, totally almost $12 billion in trade.
    The U.S. is also heavily reliant on Mexican agricultural products and commodities like sugar, flour, meat and fresh fruit and vegetables- including avocados, which see a major spike in demand spikes ahead of the Superbowl.
    (Production: Alicia Fernandez, Hugo Monnet)
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2025. Open For Restrictions - http://about.reuters.com/fulllegal.asp
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