Overview of Foreign Trade 2025

Topics of Interest in Foreign Trade for 2025

Just one month into the year, foreign trade has dominated international headlines, particularly in Mexico. This is largely due to statements and actions by United States President Donald Trump under the “America First”¹ policy. Trump has not only used tariff issues to address national security concerns, revisiting matters that had been satisfactorily resolved among USMCA partners (such as tariffs in the steel and aluminum sectors) and advancing the review / renegotiation of the agreement originally scheduled for 2026, but he also continues to announce measures that challenge the foundations of the free-trade system under the WTO (for example, the idea of a bilateral tariff balance, which contradicts the most-favored-nation principle).

On the other hand, international trade remains the main source of economic growth for Mexico, even though the anticipated benefits of “nearshoring” have yet to materialize. Our trade relationship with the US has shown sustained growth in recent years.² Together with our trade partners, we have worked in a coordinated manner to mitigate the effects of various disruptions in value chains, such as the COVID-19 pandemic, the obstruction of the Suez Canal, the conflicts between Russia and Ukraine and the shortage of microprocessors, among other events that have significantly impacted supply chains.

However, it is important to acknowledge that, despite these efforts, global supply chains remain vulnerable.³ Additionally, there is a continuing rise in protectionist measures worldwide, reflecting a trend towards protectionism that has influenced international trade dynamics.⁴ All indications suggest that 2025 will continue to be a turbulent year for international trade, making it crucial to anticipate and understand in detail any government actions that could impact trade operators. Therefore, we will now outline the foreign trade outlook for 2025 from both a national and international perspective.

International Overview

• Potential increase in Tariffs by the US

Recently, Mexico avoided a 25 percent tariff increase on its exports to the US. However, the risk remains as long as the US is not convinced of significant progress in national security concerns related to illegal immigration and drug trafficking. These issues will be reviewed periodically and bilaterally throughout 2025,⁵ which will undoubtedly create a certain degree of uncertainty until these measures are fully lifted.

Additionally, the US has announced new tariffs on steel and aluminum starting March 12, which will affect Mexico despite previous agreements that had exempted its exports from tariff increases.⁶

Based on these precedents, it cannot be ruled out that the US may continue to adopt measures to increase tariffs on Mexican products throughout 2025. Should bilateral agreements to suspend these tariffs not be reached, Mexico may be compelled to respond with tariff increases on US products. However, it is also possible that if Mexico and the US can promptly and effectively address US concerns through bilateral negotiations, their trade relationship could become even more robust compared to other global regions, particularly those led by China.

• Early Renegotiation of the USMCA

With the publication of the “America First” policy on January 20, the United States initiated the consultative process originally scheduled until October 2025.⁷ This advances the work that Mexico needs to undertake, both to understand the outcomes of the consultations in the US and to conduct its own consultations, leading up to the formal review process of those topics that will be part of the trilateral discussions in June 2026.

• International Trade Integration

In 2025, Mexico faces significant challenges in its existing trade integration with the US, as it has established an import substitution policy, particularly targeting Asian countries.⁸ Additionally, the formalities for the entry into force of the agreement with the EU⁹ are expected to be finalized. However, President Claudia Sheinbaum has been emphatic that the treaty will not include obligations in the energy sector.¹⁰

• Nearshoring

The “Plan México” also includes the relocation of companies through tax benefits¹¹ and support for technological and infrastructure investments, aiming to strengthen regional supply chains. It also envisions the continuity of the work of the Regional Economic Development and Relocation Advisory Council (CADERR), suggesting that this body will monitor the projects and objectives outlined in the Mexico Plan.

The sector likely to see the most activity in terms of relocation is the Assembly, Testing, and Packaging (“ATP”) operations within the semiconductor industry. This is explicitly mentioned in the “Plan Mexico” as a goal for 2030: to double local supply in equipment manufacturing, including Original Equipment Manufacturers (“OEMs”), Original Design Manufacturers (“ODMs”) and Contract Manufacturing Organizations (“CMOs”). The plan aims to “reduce dependency by 10% and develop local suppliers for sensors, actuators, intelligent controllers, and systems and components for electric vehicles, including batteries.”

• Strategic Sectors

Other strategic sectors¹² identified by the government of Mexico, in addition to semiconductors, include: (i) textile and footwear;¹³ (ii) pharmaceuticals and medical devices; (iii) agroindustry; (iv) automotive and electromobility;¹⁴ (v) chemicals and petrochemicals;¹⁵ (vi) consumer goods;¹⁶ and (vii) aerospace.¹⁷ These sectors are also expected to experience regulatory changes and an increase in trade and investment, particularly if the import substitution objectives in each of them are achieved.

National Overview

• Plan México

On January 13, 2025, the President of Mexico presented the “Plan Mexico” a long-term plan aimed at promoting the regional development of the country. The plan comprises 13 goals and includes a portfolio of national and foreign investments totaling USD277 billion.¹⁸ Regarding foreign trade, it is noteworthy that the “Plan Mexico” has the following missions: (i) import substitution to increase national and regional content, and (ii) increasing higher value local supply.

This strategy includes tax incentives and financing plans to encourage investment in strategic sectors, with the aim of generating an additional 1.5 million jobs and positioning Mexico among the world’s top ten economies.

• The 2025 SAT Master Plan

On January 8, 2025,¹⁹ the Tax Administration Service (“SAT”) published its “Master Plan” for the 2025 fiscal year, a document that outlines the actions and guidelines SAT will implement to optimize tax collection and strengthen oversight. Regarding foreign trade, the following practices will be subject to scrutiny:

• Abuses in VAT and Excise Tax Certification
• Improper application of the zero percent VAT rate
• Failure to return temporarily imported goods
• Incorrect customs valuation
• Abuses in the introduction of goods with preferential tariff treatment
• Misuse of benefits provided under Free Trade Agreements
• Noncompliance in presenting permits for importation
• Inaccurate tariff classification
• Inaccurate information on import/export entries

As can be observed from the agenda of the Master Plan, one of SAT’s major concerns is the low Value Added Tax (“VAT”) collection during 2024—the first year in which there has been a deficit in the collection of this tax. Consequently, increased oversight and scrutiny regarding VAT can be expected.

• IMMEX 4.0. 

As part of the “Mexico Plan,” an update to the IMMEX Program, known as “IMMEX 4.0,” was presented. This update aims to consolidate VAT and Excise Tax Certification with the IMMEX Program, thereby reducing the time required to obtain both authorizations by 50 percent. It is expected that further details on this new IMMEX 4.0 will be published by the end of February 2025.

• Origin Reviews of Uncommonly Used Free Trade Agreements

In line with the Master Plan for 2025, SAT is expected to initiate a greater number of origin reviews to verify the proper use of preferential tariff treatment under less commonly used Free Trade Agreements, such as the Pacific Alliance and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

• Main Amendments to the 2025 General Foreign Trade Rules

Noteworthy among the main amendments to the General Foreign Trade Rules are the changes to the certification of courier and parcel companies, which primarily impact digital e-commerce platforms. One significant modification is the adjustment to the de minimis benefit exemption. This change could have further implications once the US decides on concrete actions regarding this matter,²⁰ as currently contemplated within the USMCA (“T-MEC”).²¹

Recommendations

Considering the previously described situations and the anticipated complex trade overview, it would be advisable to consider the following:

• Monitor Government Policies Closely: Maintain constant and detailed vigilance over actions and measures adopted by the governments of Mexico and the US that may impact commercial operations. This is particularly relevant given the US intention to impose tariff increases on Mexican exports.
• Strengthen Dialogue with Authorities: Seek proactive engagement with fiscal and foreign trade authorities. The current Mexican administration has shown a greater openness to dialogue with the business sector, which can facilitate negotiation and adaptation to new regulations.
• Conduct Preventive Audits: Perform thorough internal reviews to ensure compliance with foreign trade obligations, thereby avoiding potential future contingencies. Additionally, it is advisable to audit key business partners to identify and mitigate risks that could affect the supply chain.
• Diversify Markets and Suppliers: Reduce dependence on specific markets, such as the US, by exploring opportunities in other regions. Similarly, consider alternatives to suppliers from countries like China in response to current trade pressures.
• Prepare for Adverse Scenarios: Develop contingency plans that account for potential cost increases due to tariffs and other trade barriers, ensuring operational sustainability in different contexts. Additionally, review all contractual relations and foreign trade operations to avoid litigation or arbitration due to external factors affecting the contractual relationships.

_{1 Available at: https://www.whitehouse.gov/presidential-actions/2025/01/america-first-trade-policy/
2 Listen to the White & Case Podcast audio: The future of trade between the US and Latin America
3 For example, in October 2024, an announced dockworkers’ strike on the US East and Gulf Coasts highlighted the persistent fragility in maritime trade: A historic strike is underway at U.S. ports — and the impact on global supply chains could be huge
4 The WTO Director-General, Ngozi Okonjo-Iweala, reported that as of October 2024, WTO Members implemented 169 new trade-restrictive measures, affecting an estimated value of USD887.7 billion, a significant increase from USD337.1 billion the previous year. Concurrently, trade facilitation measures valued at USD1.44 trillion were adopted, surpassing the USD977.2 billion from the previous period. However, Okonjo-Iweala warned about the rise in trade-restrictive measures. WTO Report
5 See W&C Client Alert: Policy Watch: Status of US 25% Tariffs on Mexican Imports
6 See W&C Client Alert: President Trump Expands Steel and Aluminum Tariffs to All Countries; Effective March 12, 2025
7 See America First Trade Policy: “The United States Trade Representative will initiate the public consultation process established under section 4611(b) of title 19 of the United States Code regarding the United States-Mexico-Canada Agreement (USMCA), in preparation for the scheduled review in July 2026.”
8 See Plan México: Goal: “50% national content in finished products with local supply from SMEs to replace imports from Asian countries.”
9 See: Negotiators Conclude the Modernized Global Agreement with Mexico
10 See: Sheinbaum: There is still no trade agreement between Mexico and the EU, but progress has been made.
11 Immediate deduction of new investments in fixed assets, applying the highest percentages to investments in high-tech sectors, research and development. An additional deduction of 25 percent of the incremental expense for training workers in collaboration with educational and research institutions. The Relocation Decree granting these benefits will expire in October 2030.
12 Source: https://www.planmexico.gob.mx/polos
13 Ensure 50 percent national content in finished products by sourcing from local SMEs to replace imports from Asian countries and achieve a 15 percent substitution of imported sewing thread.
14 Increase the national content of vehicles by 15 percent through the substitution of imported electronic components, expansion of aluminum auto parts production and development of battery cell production for electric vehicles.
15 Replace USD14 billion in imports of strategic products such as advanced polymers, lightweight composites (carbon fiber), material refining and metalworking, packaging materials and structural components.
16 Increase the national content of cross-industry inputs by 20 percent. Raise the added value in exports by 10 percent.
17 Enhance the local and regional content of exports in the industry by 10 percent.
18 Source: https://www.gob.mx/presidencia/prensa/presidenta-claudia-sheinbaum-presenta-el-plan-mexico-que-contempla-un-portafolio-de-inversiones-de-277-mmdd
19 Available at: https://www.gob.mx/sat/documentos/plan-maestro-2025-enero-2025
20 See W&C Client Alert: United States Begins to Restrain Cross-Border E-commerce
21 See Chapter 7 of the USMCA: Customs Administration and Trade Facilitation}

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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