Mexico is intensifying efforts to secure preferential tariff treatment for its automotive industry after US imports of Mexican vehicles and auto parts fell by US$4.87 billion during the first quarter of 2026. The decline comes as President Donald Trump’s administration maintains tariffs on vehicles, auto parts, steel and aluminum, adding pressure ahead of the upcoming review of the United States-Mexico-Canada Agreement (USMCA).

According to data from the US Census Bureau, US purchases of Mexican vehicles and auto parts totaled US$38.05 billion between January and March 2026, down from US$42.92 billion during the same period in 2025. The 11.3% decrease represents one of the clearest indications that recent tariff measures are affecting trade flows within North America’s integrated automotive supply chain.

The decline has reinforced Mexico’s argument that North America should be treated as a single manufacturing ecosystem, where rules of origin, regional supply chains and cross-border production are as important as tariff policy itself.

Economy Minister Marcelo Ebrard has made regional integration a central element of Mexico’s negotiating strategy. The government is seeking not only the removal of tariffs affecting regional trade but also an extension of the USMCA framework for an additional 16 years while preserving free trade among the three member countries.

The largest impact was recorded in passenger vehicles. US imports of Mexican automobiles fell from US$11.46 billion in the first quarter of 2025 to US$8.93 billion in the same period of 2026. The 22% decline represents a loss of US$2.52 billion.

Trucks, buses and special-use vehicles also recorded significant declines. Imports in that category dropped from US$11.40 billion to US$9.27 billion, a decrease of 18.7% or US$2.13 billion.

Auto parts proved more resilient. US purchases declined only 1.1%, falling from US$20.07 billion to US$19.85 billion. The relatively limited decline highlights the continued integration of manufacturing operations between Mexico and the United States despite growing trade barriers affecting finished vehicles.

Mexico remains a critical supplier to the US automotive market, accounting for approximately 40% of automotive imports among major trading partners. However, the latest figures suggest tariff policies are beginning to affect one of the most important sectors in the bilateral trade relationship.

The Mexican Automotive Industry Association (AMIA) has expressed concern regarding the impact of tariffs. Industry leaders warn that manufacturers have largely absorbed higher costs to avoid passing them on to consumers, but the ability to continue doing so is becoming increasingly limited.

Concerns within the private sector mirror those expressed by Mexican officials. Óscar del Cueto, president of the American Chamber of Commerce of Mexico (AmCham), said to Expansión some vehicles manufactured in Mexico currently face higher tariff burdens than vehicles imported into the United States from Europe.

“If today we bring a vehicle from Europe into the United States, it pays lower tariffs than a vehicle shipped from Mexico to the United States. Those are the kinds of issues that concern us most,” Del Cueto said.

He added that companies continue discussions with authorities in both countries to reduce the impact of trade measures implemented by Washington. “We understand there will not be completely free trade, but we must find ways to ensure that the tariffs currently in place have less impact on those of us operating within the region,” Del Cueto said.

Automakers and suppliers currently face 25% tariffs on automotive products and 50% duties on steel and aluminum under Section 232 of US trade legislation.

Mexico’s concerns are also linked to ongoing negotiations over USMCA rules of origin. According to people familiar with discussions cited by Reuters, the United States has proposed increasing regional content requirements for vehicles from 75% to 82% while requiring that 50% of every vehicle’s value originate specifically from the United States.

If implemented, the proposal would represent one of the most significant revisions to the automotive framework established under the USMCA in 2020.

Mexican President Claudia Sheinbaum has repeatedly emphasized that eliminating tariffs remains the government’s top priority during negotiations with the United States.

“The priority of Mexico in the dialogue with the United States is that there be zero tariffs in the automotive industry, steel and aluminum,” Sheinbaum said during a March 20 press conference.

Bilateral negotiations began in Mexico City and are expected to continue through additional rounds in Washington and Mexico later this year. The discussions focus primarily on industrial goods and automotive manufacturing, one of the largest sectors within North America’s approximately US$1.6 trillion annual trade relationship.

The tariff issue extends beyond Mexico. Total US automotive imports from major suppliers fell from US$112.36 billion during the first quarter of 2025 to US$95.40 billion during the same period of 2026, a decline of 15.1%.

Canada experienced an even larger decline than Mexico. Canadian automotive exports to the United States fell 22.8%, dropping from US$14.25 billion to US$11.00 billion. Automobile exports declined 34.9%, while truck and special vehicle shipments decreased 40.4%. Auto parts exports, however, increased 5.4%.

Asian exporters also recorded losses. Japan’s automotive exports to the United States declined 13.3%, South Korea’s fell 12.7% and China’s dropped 22.9%.

European suppliers were similarly affected. Germany recorded a 25.3% decline, Italy fell 32.3% and the United Kingdom dropped 29.8%.

Sweden was the only major automotive exporter to increase sales to the United States during the period. Exports rose from US$968 million to US$1.10 billion, representing growth of 13.7%. Analysts attribute part of the increase to Volvo’s continued strength in the US market and a special authorization allowing the company to continue importing vehicles equipped with connectivity technologies despite broader restrictions affecting products linked to China.

As USMCA negotiations continue, Mexico is seeking to preserve the advantages created by decades of regional integration. Meanwhile the United States is pushing for significant changes to automotive rules of origin under the USMCA, proposing that 50% of the value of every vehicle produced within North America originate specifically from US-made content. According to Reuters, the proposal was presented during bilateral negotiations with Mexico in Mexico City and would also raise the regional content requirement from 75% to 82%, tightening eligibility criteria for preferential tariff treatment.