Report: Mexico’s auto exports to the US would face a 2.4 million units cap

The new tentative trade deal between Mexico and the United States would allow President Donald Trump to impose punitive “national security” tariffs for up to 25% on imports of Mexico-made vehicles and auto parts above certain volumes, according to an exclusive report by Reuters citing auto executives as sources.

The previously unreported side agreement would set an import cap of 2.4 million vehicles and US$90 billion worth of auto parts, the report says.

Reuters said that Mexico exported in 2017 nearly 1.8 million vehicles to the United States, but according to data from the Mexican Automotive Industry Association, the figure is actually 2.3 million (2,335,245 vehicles) which leaves little room for a tariff-free growth.

The scenario is completely different for auto parts, which, according to Oscar Albin, head of the National Autoparts Industry group, amounted to US$63 billion in 2017, leaving room for a 42.8% growth tariff-free. 

However, the report also states that “terms of the deal are not final, and could change depending on the outcome of negotiations between the United States and Canada, as well as other factors”.

It’s also worth noting that both U.S. and Mexico trade officials declined to confirm or comment on the report.

MexicoNow

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