The Mexican industries threatened by Trump's tariffs

US President-elect Donald Trump's threat to impose a 25% tariff on products imported from Mexico and Canada would affect various industries. Still, the automotive, electronics, and household appliance industries could be the hardest hit.

The US tariffs "could probably cause inflation and would impact the final product for the US consumer. The automotive industry and its supply chain would be affected since these are goods that constitute a large part of our exports to the US," Alejandro Luna Arena, partner responsible for foreign trade at law firm Santamarina + Steta, told BNamericas.

According to the Mexican government, the measure would primarily affect US companies with plants in Mexico that export their output to the US, including Ford, General Motors and Stellantis.

Economy minister Marcelo Ebrard said on Wednesday that the tariff would be equivalent to doubling taxes on profits in the US for these companies.

"The impact on businesses is huge. We think that in the end these taxes will more or less affect the consumer in the United States and 400,000 jobs would be lost," he said at a press conference.

Ebrard added that 88% of pickup trucks in the US are made in Mexico and the tariff would hike the average price per unit in the US by around US$3,000, according to figures from his ministry.

Luna explained that other affected industries would be those related to electronic components.

“Certain electronics, household appliances and a range of consumer and agricultural goods could also be affected, although Trump has not been as vocal about this last category,” he said.

In 2019, both countries found themselves in a similar situation, after the US announced tariffs on steel and aluminum from Mexico. For its part, Mexico responded with similar measures on American products, including cheeses, fruits, steel, tubes, electricity transmission towers, laminated sheets, rods, drill pipes and hot rolled tubes.

The US subsequently lifted the tariffs on the metals imported from Mexico.

Grupo Financiero Monex predicts that if Mexico were to impose taxes on US products as it did five years ago, the same categories of goods would be affected.

According to Ebrard's presentation, if Mexico decides to apply retaliatory tariffs on US imports, the automotive companies would also be badly affected since "they are the ones that export the most auto parts to Mexico."