ARTICLE
1 September 2025

Mexico's Progress In The Temporary Tariff Suspension Agreement With The United States

VT
Vazquez Tercero & Zepeda

Contributor

Vázquez Tercero & Zepeda (VTZ) is a leading Mexican law firm specialized in international trade and customs. With over 50 years of experience, our firm offers comprehensive advice on complex legal matters, helping companies navigate domestic and international challenges with tailor-made solutions.
On July 12, 2025, President Donald Trump announced the imposition of a 30% tariff on Mexican products effective August 1.
Mexico International Law

On July 12, 2025, President Donald Trump announced the imposition of a 30% tariff on Mexican products effective August 1. The United States justified this measure citing insufficient progress by Mexico in controlling migration and combating fentanyl.

We should recall that, back in March 2025, the U.S. had already imposed a 25% tariff on Mexican exports under the IEEPA Law on the same grounds (see our prior alert). This tariff only applies to Mexican exports that do not comply with the rules of origin under the United States-Mexico-Canada Agreement (USMCA), which raised questions as to whether the newly announced measure would be an additional tariff or an increase from 25% to 30%.

Despite these "threats," Mexico and the United States reached an agreement on July 31 to suspend the application of the 30% tariff for an additional 90 days. However, not everything is "smooth sailing," since the existing U.S. tariffs remain in place, namely:

  • 25% tariff on Mexican exports that do not qualify under the USMCA.
  • 25% tariff on vehicles manufactured in Mexico that do qualify under the USMCA, applied to the non-U.S. content. However, auto parts from Mexico that comply with the USMCA remain exempt.
  • 50% tariff on steel content from Mexico under the USMCA, except for products melted and rolled in the United States.
  • For aluminum, Mexican exports under the USMCA face a 50% tariff on the aluminum content, unless the material is smelted in the U.S.
  • Mexican copper currently faces a 25% tariff applied solely to the copper content of the good.

Accordingly, Mexico has until October 29, 2025, to meet its commitments on security and trade. If no progress is made, the 30% tariff would take effect on October 30. In this alert, we briefly address the agreement and Mexico's progress on the trade front.

What is the Agreement with Mexico about?

In addition to security-related commitments, President Trump emphasized that Mexico "agreed to immediately eliminate its non-tariff trade barriers, of which there are many." Curiously, he did not specify which or how many measures would be removed.

What originally began as a "national security" matter tied to migration and drug trafficking is now evolving into a trade issue. This reflects the new U.S. trade policy, as announced by the head of the United States Trade Representative's (USTR) office in an editorial published in The New York Times: the United States will use tariffs as a tool to open markets for its exports.

What Are the Main Non-Tariff Barriers in Mexico, According to the USTR?

Each year, the USTR publishes a report on foreign trade barriers. This report identifies the measures that, in the view of the U.S., Mexico should modify or eliminate in order to facilitate bilateral trade.

Sanitary Procedures:

The USTR highlights delays at the Federal Commission for the Protection against Sanitary Risks (COFEPRIS). For example, sanitary registrations and import permits can take up to two years, affecting medical devices and pharmaceuticals. These delays are partly due to a lack of staff and institutional capacity.

The USTR also points out trade barriers in trade, services, and investment, including:

  • Intellectual Property: The USTR points to deficiencies in intellectual property protection and the widespread availability of counterfeit products. The U.S. criticizes poor coordination among different levels of government and the lack of deterrent sanctions.
  • Glyphosate: Mexico prohibited the import and use of glyphosate, but enforcement of this ban has been postponed indefinitely. As a result, the U.S. insists that import permits should be granted.
  • Mining: In 2022, Mexico reformed its Mining Law to give the State exclusive control over lithium, among other aspects, which according to the U.S. has undermined foreign investment.
  • Energy: Since 2018, Mexico has strengthened state control in the energy sector, prioritizing CFE and PEMEX, which the U.S. claims negatively impacts foreign investment.
  • Telecommunications: The USTR notes that the elimination of the Federal Telecommunications Institute (IFT) and other autonomous agencies in 2024 raised significant concerns regarding Mexico's compliance with its obligations under the USMCA.

Will Mexico Eliminate All Trade Barriers?

Although the details of the agreement with the United States were not published or disclosed, Mexico reportedly committed to the following points, according to a Mexican news outlet:

  • Streamlining procedures in the medical and pharmaceutical sector.
  • Combating unfair trade practices, particularly against Asian imports in sensitive sectors such as textiles, footwear, and steel.
  • Strengthening regional supply chains.
  • Reinforcing labor rights.

In other words, it appears that Mexico did not agree to eliminate all of its non-tariff trade barriers. However, an industry association also reported that Mexico must address 54 non-tariff trade barriers identified by the USTR—meaning a significant portion, if not all, of the measures.

What progress has been made?

Medical and Pharmaceutical Sector
On August 11, 2025, the Ministry of Health published a measure eliminating the requirement of physical documents for 29 different import procedures, while maintaining the essential information through online forms. Key changes include the elimination of requirements for original labels, sanitary licenses, operation notices, and several certificates that previously had to be submitted physically. For more information, see our alert.

Combating Unfair Trade
Recently, Mexico proposed reestablishing a North American Steel Committee, similar to the one that operated under NAFTA. This committee would include steel companies and authorities from both countries, and could eventually incorporate Canada. Its purpose would be to strengthen the regional steel ecosystem, reduce dependence on Asian imports, and establish coordinated trade measures that support the local industry.

For the past few months, Mexico has also taken measures affecting steel imports from Asia. As reported in our prior alert, Mexico removed more than 1,000 mills from its official registry. This is a significant measure because it prevents importers from obtaining automatic import licenses for steel products that use substrate from mills located in Mexico's trading partners, such as Vietnam and Malaysia. Clearly, this measure could serve U.S. interests, but the question remains: will this policy continue over the next 60 days?

Other Measures

So far, the Mexican Government has not announced new actions to "strengthen regional supply chains" or to guarantee compliance with labor rights, including the ban on imports made with forced labor.

The Mexican Government is also working on consultation mechanisms with the private sector as part of its trade commitments. The objective is to establish a more inclusive framework for dialogue. This leads us to ask: what further steps will Mexico take in the next 60 days, and will they be sufficient?

Conclusion

Unlike Mexico, Canada was unable to secure a suspension of the tariff increase. In August 2025, the United States imposed a 35% tariff on Canadian products. Interestingly, Canadian exports that meet USMCA rules of origin continue to benefit from preferential tariff treatment under the agreement. In fact, Canadian Prime Minister Mark Carney stated that more than 85% of bilateral trade remains tariff-free.

Should the United States continue to consider that Mexico has made insufficient progress on security issues or in addressing existing "non-tariff barriers," Mexico could face a similar scenario in October. Nevertheless, approximately 85% of Mexican trade already enters the U.S. tariff-free under USMCA preferences or exemptions.

As the USTR has warned, the United States has adopted a new trade policy in which tariffs are used as a tool to open markets. We therefore expect the U.S. to continue pushing new issues and pressing further "tariff threats," to the detriment of predictability and legal certainty in North American trade. However, Mexico must also begin seriously reviewing its non-tariff trade barriers to help ease future tensions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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