U.S. renews 10% tariff; exempts goods meeting USMCA

The United States has announced new tariffs of 10% on goods from Mexico and 59 other nations, replacing existing tariffs that expire today. U.S. Trade Representative Jamieson Greer stated the measure is necessary because these countries have not effectively implemented prohibitions on imports of goods produced with forced labor. For Mexico, the tariff rate remains 10%, a point of contention as the country sought tariff elimination on steel, aluminum, and the automotive industry during recent USMCA negotiations.

Mexico's Secretary of Economy, Marcelo Ebrard, assured that 85% of Mexican exports that comply with the USMCA trade agreement are excluded from the new tariff, stating, "there is no change." He explained that the tariff's basis has shifted from Section 122 to Section 301 of the U.S. Trade Act, but the effective rate remains the same. The U.S. administration argues that Mexico does not efficiently utilize its legislation against child or forced labor, or against the use of goods produced in third countries where workers are enslaved.

In addition to Mexico, countries like Canada, Argentina, the United Kingdom, and India will face the 10% tariff. Another group, including the European Union, Taiwan, Japan, South Korea, and Switzerland, will see tariffs ranging from 10% to 12.5%. Countries accused by the U.S. of not imposing any prohibition on goods produced through forced labor, such as Australia, Brazil, Chile, Colombia, Peru, Russia, and Venezuela, will face a 12.5% tariff.

Ebrard met with Greer this week in Mexico City for negotiations, agreeing to a fourth round of talks in early September as part of the USMCA review. The focus is on strengthening North America's economic security and competitiveness for the benefit of workers and businesses. The Ministry of Economy reported constructive discussions with progress on steel, aluminum, strategic sectors, supply chain strengthening, and import substitution from Asia. Mexican exports to the U.S. reached $54 billion in May, a 17% increase year-over-year, marking a record high since 1985.