On March 4, the US-Mexico border experienced a complete standstill. The trucks that Thor Salayandia planned to send across the border checkpoint were stranded in the lot. The only movement was the palpable confusion in the air.
Salayandia owns and operates a factory in Juarez, Mexico, producing auto parts and shipping truckloads of metal tubes to warehouses in Texas for assembly. Over the past month, his business has been thrown into turmoil.
“It’s becoming a political game… for two days, traffic was significantly reduced. Even US officials didn’t know whether to charge trailers crossing the border,” he said, referring to the tariff threats and counterthreats between the US and Mexico. “There’s so much at play… It’s misinformation, confusion, and uncertainty. There are a lot of unknowns—how the tariffs will be introduced, how they’ll fit, how they’ll be charged.”
President Donald Trump’s complicated tariff policies have left major industries operating between Mexico and the US—from automotive to agriculture to textiles—scrambling to comply with shifting rules and questioning their futures.
On March 26, Trump announced new 25% tariffs on cars and car parts manufactured abroad, set to take effect on April 3. These tariffs will force Salayandia to reduce his workforce, and he is now considering relocating his factory to Texas, where he would invest in automation and robotics to offset high labor costs.
“Past politicians envisioned a globalized world where goods were manufactured in lower-cost countries… but now, with Trump’s alternate economic vision, manufacturers are starting to rethink production methods,” Salayandia said.
On March 4, when his trucks were stuck at the border, a 25% tariff was set to be imposed on US imports from Mexico. However, as the Mexican business community anxiously awaited whether President Claudia Sheinbaum could negotiate a way out of the order, Trump announced that goods covered under the USMCA (United States-Mexico-Canada Agreement, or T-MEC in Spanish) would be exempt from tariffs until April 2. This spared over half of imports from tariffs for another month.
The new rule did not fully reassure Mexican business leaders, who say uncertainty persists as they rush to comply with T-MEC and brace for potential future policies.
Mexican politicians have noted that the peso has remained relatively stable, trading between 20 and 21 pesos to the dollar.
Mexico’s Economy Secretary, Marcelo Ebrard, stated he would work with companies, particularly the massive automotive industry, to ensure 90% of exports align with T-MEC guidelines. However, this process could take months. With the new auto-focused tariffs announced last week, these efforts may now be in vain.
“We are seeking preferential treatment for Mexico to protect jobs and economic activity,” Ebrard said during a March 27 press conference. “We’ve already held six meetings with the US commerce secretary… no other country has this level of communication with the US.”
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Around 40% of car parts used in vehicles sold in the US are manufactured in Mexican cities whose economies rely on auto factories. The Mexican automotive industry generates over $100 billion annually and exports more than three million cars, primarily to the US.
Alberto Bustamante, director of Mexico’s National Agency of Automotive Industry Providers, said the tariffs are impacting the industry in different ways, depending on whether companies export parts or fully assembled cars. It also raises philosophical questions, such as “What constitutes a car?”
“As the private sector, we don’t have options. If it were up to us, we’d have already resolved this, but it’s in the government’s hands,” Bustamante said. “In the US, five million jobs are at risk if these tariffs take effect, and in Mexico, one million.”
He noted that specialty and luxury vehicles with unique parts, as well as those made with steel or aluminum, will be most affected by the tariffs. Trump has also imposed a 25% tariff on goods made with these metals, effective March 12.
Given the difficulty and time required to comply with T-MEC guidelines, affected companies must decide whether paying the 25% tax is worth it or if they should shut down operations in Mexico and relocate.
Instead of focusing on the current turbulence, President Sheinbaum is aiming to reform the T-MEC deal to ensure long-term economic stability for Mexico. However, she won’t have the opportunity until 2026, when the agreement is up for review. If Trump implements the auto tariffs on April 3, Mexico will respond with counter-tariffs.
Meanwhile, Bustamante said automakers are rethinking their 10-year plans, considering either leaving Mexico as a manufacturing hub or shifting focus away from the US as their primary market.
Cars aren’t the only products in limbo. Other goods, from washing machines to peanuts to medical instruments, also face varying degrees of compliance with T-MEC.
Avocados—a nearly $3 billion industry and a culinary pride of Mexico—don’t always fit into T-MEC, depending on the harvesting and sanitation processes used by specific companies. Mexico exports over two billion pounds of avocados annually to the US, and the tariffs could drive up prices as growers rush to ensure compliance with T-MEC regulations.
“Our plan is to open new markets,” said Eleazar Oceguera, director of the Association of Producers and Exporters of Avocados in Jalisco. “If there’s any problem, we want an alternative. We can’t rely on just one market anymore.”
Both Oceguera and Bustamante emphasized that the real cost will fall on American consumers, as thousands of products will become more expensive, with car prices rising by several thousand dollars per vehicle.
The uncertainty has even spread to industries fully compliant with T-MEC, as Trump considers sweeping tariffs. Such a move could push Mexico into a recession while driving up prices in the US.
“We will always defend Mexican companies; it’s part of our fundamental work,” Sheinbaum said on March 27. “The essence of the T-MEC trade deal is that there should be no tariffs. That is the essence.”
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