U.S. Considers Tariff Discount for Mexican Heavy Vehicles, Ebrard Confirms

U.S. Considers Tariff Discount for Mexican Heavy Vehicles

The United States is reportedly considering a discount on the recently announced 25 percent tariff on medium- and heavy-duty vehicles imported from Mexico. Mexican Economy Minister Marcelo Ebrard confirmed this development on Friday, October 10, stating that the mechanism would be similar to one already implemented for light vehicles.

This potential discount comes as the U.S. prepares to impose a 25 percent tariff on all imported medium and heavy trucks, effective November 1, 2025. A similar tariff on light vehicles has been in effect since April 2025, enacted via a presidential executive order. These measures are part of broader efforts by the U.S. administration to safeguard domestic manufacturing and address trade imbalances.

Details of the Proposed Discount Mechanism

Minister Ebrard indicated that the discount process for heavy vehicles would mirror the existing arrangement for light vehicles. Under this precedent, the U.S. reduced the tariff on light vehicles originating in Mexico from 25 percent to an approximate average of 15 percent. This reduction is contingent upon vehicles complying with the rules of origin stipulated by the United States-Mexico-Canada Agreement (USMCA).

Automakers that adhere to USMCA content requirements can offset the value of U.S.-made parts. For instance, a vehicle manufactured in Mexico with 40 percent U.S. content would face an effective tariff of 15 percent. The USMCA mandates stringent rules of origin, including a 75 percent Regional Value Content (RVC) for vehicles and 70 percent for heavy trucks, along with a Labor Value Content (LVC) rule requiring 40-45 percent of a vehicle's value to be produced by workers earning at least $16 per hour.

Implications for U.S.-Mexico Automotive Trade

Mexico stands as the largest exporter of medium- and heavy-duty trucks to the United States. From January to August 2025, a significant 94.8 percent of Mexico's heavy vehicle exports were destined for the U.S. market. The imposition of these tariffs has raised concerns about potential disruptions to supply chains and increased production costs for the automotive industry.

Mexican officials, including President Claudia Sheinbaum and Economy Minister Ebrard, have been actively engaged in discussions with their U.S. counterparts to navigate the implications of these tariffs. While the tariffs appear to contradict the spirit of the USMCA, which is scheduled for review in 2026, the proposed discount offers a potential pathway to mitigate some of the economic impacts on the highly integrated North American automotive sector.