U.S. Maintains New Tariffs on Mexico: Exports Could Drop by 70%

The administration of Donald Trump is maintaining a strict tariff policy against Mexico — the largest trading partner of the United States, surpassing both Canada and China. The previously announced 90-day pause on new tariffs, introduced in early 2025, was not extended in April, US News reports. Analysts warn this could push Mexico into a recession.

According to Bloomberg, in 2025 the U.S. imposed 25% tariffs on all goods from Mexico, initially exempting those covered by the USMCA trade agreement. A 90-day grace period followed but expired without renewal.

Trade Impact: Mexico’s Economy at Risk

Mexico is the most exposed U.S. partner amid ongoing trade tensions. Around 75% of Mexico’s exports go to the U.S., accounting for nearly 30% of the country's GDP. In contrast, only 14% of U.S. exports go to Mexico.

In 2024, bilateral trade hit a record $840 billion, including $506 billion in Mexican exports to the U.S. and $292 billion in U.S. exports to Mexico (FreightWaves).

Mexico’s top exports to the U.S. include:

Vehicles and auto parts

Electronic and data processing equipment

Medical instruments

Fruits and vegetables

From January to November 2024, auto exports totaled $82.1 billion, roughly 20% of total shipments.

Automotive Sector in the Crossfire

Global automakers operate production lines in Mexico, geared toward the U.S. market. In 2024, the auto industry contributed 4.7% of Mexico’s GDP and 21.7% of industrial output, according to Automotive Logistics.

Even Detroit giants like GM, Ford, and Stellantis are vulnerable. Analysts estimate that the effective tariff rate on vehicles may reach 16%, though USMCA-covered goods are still exempt.

Why the U.S. Is Raising Pressure

Washington says tariffs aim to:

Fight illegal migration

Curb fentanyl smuggling

Reduce the U.S. trade deficit, which reached $172 billion with Mexico in 2024, up 13% from 2023

The U.S. also suspects China is using Mexico as a transit hub to bypass direct import restrictions. Tariffs are now part of a broader strategy to rebuild U.S. industry, encourage reshoring, and enhance negotiating leverage.

Mexico’s Response

In response to growing tensions:

10,000 troops were deployed to the U.S. border

Mexico accepted back deported migrants

29 suspected drug traffickers were extradited

According to U.S. Customs, fentanyl seizures fell 40% in February 2025 versus January, reaching their lowest since December 2021. Yet tariffs remain in place, as many analysts view them as Trump’s bargaining tool rather than a fixed policy.

Economic Forecasts & Risks

According to Bloomberg Economics, restoring 25% tariffs could cause Mexican exports to the U.S. to shrink by 70% in the medium term — a major blow for an economy already slowing down.

In Q4 2024, Mexico’s GDP contracted by 0.6%, the first decline since 2021

The OECD revised its 2025 forecast to –1.3% growth (previously +1.2%)

Inflation is expected to rise to 4.4%

Another concern: remittances. In 2024, Mexicans in the U.S. sent home $65 billion, or 3.5% of GDP. Any drop in these flows during a recession could deepen domestic issues.

Currency & Inflation Outlook

As Reuters reports, annual inflation in March 2025 reached 3.8%, still within the central bank’s 2–4% target. But policymakers warn that tariff uncertainty may weaken the peso and raise inflation.

With two quarters of negative growth, Mexico may already be entering a technical recession.