Mexican President Claudia Sheinbaum has flagged the country’s top priority in the upcoming USMCA renegotiation as eliminating tariffs on automobiles, steel, and aluminum — without compromising sovereignty.
The President spoke in a press conference late last week at the National Palace, following the formal start of bilateral trade discussions between Mexico and the United States on the USMCA review.
Sheinbaum highlighted the deep integration of the automotive industry. For every job created in Mexico, up to two jobs are generated in the United States, she said.
“It is very important to recognize the benefit the United States gets from the agreement, because we know the benefit it brings to Mexico,” she stated.
“Due to the strong linkage in the [auto] industry, some parts are manufactured in Mexico and others in the United States.”
Mexico’s business community backed the review process.
Drawing on consultations across all 32 states and 573 companies and associations, business leaders called for modernizing the agreement rather than reopening its core chapters.
According to Mexico Business News, 84% of participants rated the USMCA’s impact as positive or very positive.
Economy Minister Marcelo Ebrard emphasized Mexico’s goals last week: to guarantee the permanence of the agreement, avoid annual reviews, and eliminate tariffs within the region.
“It’s not that Mexico has taken jobs away from the United States, as is sometimes thought,” Claudia Sheinbaum noted. “One job here generates at least one or two jobs there, according to various studies.”
The President added that these arguments are “being presented at the negotiating table with the US government’s trade office.”
Sheinbaum said nearly all 54 non-tariff measures raised by the United States as barriers under the USMCA have been resolved, however, some disputes remain.
The President assured that in negotiations with Washington, the Mexican government will not concede on issues that could compromise national sovereignty.
Elimination of Auto Tariffs
When questioned about her Administration’s priorities for the bilateral discussions, Sheinbaum was direct.
“Clearly, the priority is to have zero tariffs, as there were before President Trump’s arrival, in the automotive industry, steel, and aluminum,” she stated.
While admitting that “there are some specific issues related to improving the trade agreement, but essentially that is the main goal.”
Rogelio Garza, President of Mexico’s Asociación Mexicana de la Industria Automotriz (AMIA), described the continuation of the 25% vehicle tariff as the worst-case scenario.
Detroit automaker General Motors and Ford both rely on Mexico as a manufacturing base, but their exposure differs significantly.
GM imports roughly half the vehicles it sells in the US, with about a quarter of its total sales coming from Mexican plants.
Ford is less exposed — as around 80% of the vehicles it sells domestically are already built in the US.
The tariff regime has accelerated a partial reshoring of General Motors‘ production.
In June 2025, the company announced a $4 billion investment to move production of the gas-powered Blazer and Equinox to US plants starting in 2027.
CEO Mary Barra said the company expected to offset tariff costs by about 30% through the shift, which also affects Canadian production.
At the same time, GM is converting its Ramos Arizpe plant in Mexico into a dedicated EV facility.
It will produce the Equinox EV, Blazer EV, Cadillac Optiq, and Honda Prologue.
Earlier this year, GM committed an additional $1 billion to Mexican production, with Economy Minister Ebrard confirming that all four GM plants in Mexico would continue operating.
Ford has not announced any comparable production shift, as it continues to build the Mustang Mach-E at its Cuautitlán plant and the Bronco Sport and Maverick at Hermosillo.
All three Detroit automakers — GM, Ford, and Stellantis — have urged the US trade representatives to preserve the USMCA’s core structure ahead of the July 1 review.
Canada-US Tensions
The EV sector has become a central flashpoint in the US-Canada trade rift — which could lead to the elimination of the USMCA agreement in a worst case scenario.
The fracture opened in January when Prime Minister Carney struck a deal with Beijing.
The agreement allows up to 49,000 Chinese EVs into Canada at a 6.1% tariff per year, replacing the 100% surtax imposed in 2024.
US President Donald Trump initially endorsed the move but later threatened 100% retaliatory tariffs on Canadian goods.
The deal has faced domestic opposition as well, with the Conservative Shadow Minister for Industry calling it “frankly incomprehensible.”
Conservative leader Pierre Poilievre earlier this month unveiled a plan to double Canada’s vehicle production through a tariff-free auto pact with the US.
He also pledged to scrap the Chinese EV quota and ban Chinese software in vehicles to align with American cybersecurity rules.
In February, Prime Minister Mark Carney unveiled a broader auto strategy for Ottawa, where he positioned Canada as a leader in next-generation vehicle manufacturing.
Canada has been actively courting new automaking partners beyond the US, including not only China but also South Korea.
It also tied a $20 billion submarine contract to demands that South Korea opens auto assembly plants in Canada.
Mexico and Canada
As the July 1 deadline for the USMCA’s joint review approaches, Mexico and Canada have been building a bilateral track of their own.
They are positioning themselves as coordinated partners, even as the United States drives the pace of formal negotiations.
The groundwork was laid last September when President Sheinbaum and Prime Minister Carney met in Mexico City and pledged a new era of cooperation.
Economy Minister Ebrard and Canada’s Trade Minister Dominic LeBlanc launched a joint economic action plan during the largest Canadian trade mission to Mexico on record last month.
The initiative targets collaboration in critical minerals, port infrastructure, aerospace, AI, and supply chain security. A formal plan will be presented to both leaders in the second half of 2026.
Formal US-Mexico USMCA negotiations opened in Washington last week without Canada at the table, with the US Trade Representative acknowledging that talks with Ottawa are lagging behind.
Ebrard confirmed over the weekend that he plans to visit Canada in May — when Ottawa is expected to formally join the trilateral review.
