Mexico's tariffs on China: Important move ahead of USMCA Talks

Mexico has been criticized for its compliance with the conditions of the US-Mexico-Canada Agreement. Amongst the concerns:

• A lack of transparency in its trade statistics. Despite multiple assurances by Mexican officials that accurate, timely publication of its import and export data would be forthcoming, nothing has executed. This is a governmental problem.
• A lack of compliance with USMCA rules of origin for automotive goods. USMCA stipulates 75% of the auto trade must be of North American origin for steel and aluminum. This is a combined government and industry problem. US Customs and Border Protection (CBP) has done a poor job of auditing declarations by Mexican OEM. Those OEM have also not been forthright in making declarations. Anecdotal evidence suggests some of the auto trade does not comply with the rules.
• Inconsistent application of import duties. Mexico has on again/off again tariffs on aluminum. In April 2024, Mexico announced 35% duties on aluminum. On May 9, 2024, it revoked the duties, indicating there was insufficient domestic production and supply to provide for the local markets. This leaves Mexico as a duty unpaid market for primary aluminum and OEMs are taking advantage.
• A conduit for circumvention for trade goods from China and Russia. This has been a recurring theme, with complaints that Chinese aluminum and steel have found its way into Mexico manufactured goods and been exported to the US. This concern is directly tied to USMCA compliance.