U.S. Trade Representative Delivers Firm Message on Tariffs to Mexican Industries
In a series of high-level meetings held in Mexico City this week, U.S. Trade Representative Jamieson Greer delivered a clear message to Mexico's automotive and steel sectors: President Donald Trump's tariffs on their exports are not going away, regardless of the ongoing renegotiation of the U.S.-Mexico-Canada Agreement (USMCA).
"Tariffs Are Here to Stay"
According to four industry sources familiar with the discussions who spoke on condition of anonymity, Greer told business leaders that the Trump administration has no intention of returning to a zero-tariff environment. "Greer said tariffs are here to stay. President Trump likes them. We will never go back to a zero-tariff world," one source who attended the meetings revealed.
The meetings occurred as a July 1 deadline approaches for the six-year review of the USMCA trade pact. Greer met with several influential Mexican business organizations including:
- The American Chamber of Commerce of Mexico
- Mexico's Business Coordinating Council
- The Mexican Automotive Industry Association
- The National Chamber of the Iron and Steel Industry
Impact on Highly Integrated Industries
Mexico's automotive and steel industries are particularly vulnerable to U.S. tariff policies, with more than 50% of their exports destined for the United States. The current situation represents a dramatic shift from more than three decades of tariff-free trade under NAFTA and its successor USMCA.
President Trump imposed a 25% duty on global automotive imports last year under Section 232 of the Trade Expansion Act of 1962, citing national security concerns. Since then, the administration has negotiated lower tariffs with other trading partners:
- 15% tariffs on automotive imports from Japan, the European Union, and South Korea
- 10% tariffs from Britain
This has created a situation where it's now cheaper to ship some vehicles from these countries to the United States than from Mexico, putting Mexican manufacturers at a competitive disadvantage.
Specific Industry Impacts
Automotive Sector: A second source confirmed that Greer told Mexican auto industry representatives that at least some level of tariffs would remain, though there might be adjustments to ensure Mexico remains competitive with other regions. U.S. negotiators have also proposed changing rules of origin to require that 100% of key components like engines, major electronics, and software be sourced from North America, up from the current 75% requirement.
Steel Industry: Two sources indicated Greer delivered a similar message to Mexico's steel sector, which faces a 50% U.S. duty on commodity steel and aluminum products and a 25% duty for derivative goods containing at least 15% of these metals by weight.
Economic Consequences and Negotiation Timeline
The economic impact has been significant for Mexico's auto industry. According to the Mexican Automotive Industry Association (AMIA), U.S. buyers purchased 2.8 million of the 4 million vehicles produced in Mexico in 2024. However, after three decades of growth, vehicle exports to the U.S. fell nearly 3% in 2025 following the tariff imposition.
"We cannot continue like this," AMIA president Rogelio Garza told Reuters earlier this year, noting that Mexico lost approximately 60,000 auto industry jobs in 2025 alone.
Following Monday's meetings, Greer and Mexican Economy Minister Marcelo Ebrard issued a joint statement announcing they would launch formal bilateral negotiations during the week of May 25 in Mexico City to address U.S.-Mexico issues within the USMCA framework. Technical talks will continue this week on several key areas:
- Economic security
- Strengthened rules of origin for key industrial goods
- Collaboration on critical minerals
- Bilateral trade irritants
Greer has consistently defended the Section 232 tariffs as essential to bringing manufacturing jobs back to the United States after decades of factory migration to lower-cost Mexico. Meanwhile, Mexican President Claudia Sheinbaum stated prior to meeting with Greer that Mexico seeks a preliminary agreement on steel and automotive duties before completing the USMCA review.
