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The United States’ new tariff on foreign cars is having an impact on the Mexican automotive industry, official data indicates.
The national statistics agency INEGI reported on Monday that Mexico’s exports of light vehicles declined 2.9% in annual terms in May, the month after the Trump administration imposed a tariff on all foreign cars. Domestic production of cars fell 2% last month, INEGI said.
United States content in vehicles made in Mexico is exempt from the 25% tariff the U.S. government imposed on foreign cars in early April, reducing the duty on Mexican cars to an average of 15%, according to Economy Minister Marcelo Ebrard.
Nevertheless, the duty is detrimental to a Mexican automotive industry that had grown accustomed to tariff-free trade in North America thanks to the USMCA and NAFTA. Around 80% of the vehicles Mexico exports go to the United States.
INEGI reported that Mexico exported a total of 301,112 light vehicles last month, while 358,209 vehicles were assembled in the country.
