Mexico faces critical USMCA talks as manufacturing shifts threaten Juárez

CIUDAD JUÁREZ, Chihuahua (KVIA) -- As the third round of United States-Mexico-Canada Agreement (USMCA) renegotiations begins in Mexico City, ANIERM delegate Marcelo Vázquez Tovar warned of critical challenges facing Chihuahua's industries.

To counter U.S. pressure and labor disputes, experts urge Mexico to prioritize domestic input substitution and technological development to reclaim industrial sovereignty.

The third bilateral round of USMCA renegotiations between Mexico and the United States took place this past Tuesday, Wednesday and Thursday in Mexico City.

Negotiating teams addressed critical issues including metal tariffs, automotive sector rules of origin, transshipment and labor conditions; other key issues include declining automotive exports affecting local maquiladoras.

These discussions hold significant implications for local economies in regions like Juárez and Chihuahua.

Marcelo Vázquez Tovar, delegate for the National Association of Importers and Exporters of the Mexican Republic (ANIERM) in Chihuahua, called for an analysis of the risks and opportunities facing the local industry ahead of the negotiations.

According to Vázquez Tovar, the agenda's key topics directly impact the region's economic stability.

The trade in steel and aluminum, along with their derivative products, has significantly impacted maquiladoras and local workshops south of the border.

These entities, which produce machined parts and other inputs for export or local supply chains, are struggling to source these materials because Asia remains the primary supplier.

The automotive industry in Juárez and Chihuahua has seen its exports fall directly due to tariffs; this has led to a sharp decline in automotive employment in Juárez.

Japanese automakers like Honda and Toyota have modified operations to avoid these tax burdens.

North American economic security and the issue of transshipment are also under discussion.

The United States seeks to prevent inputs from outside the USMCA region from indirectly benefiting from the agreement.

More than 80% of the inputs imported into Juárez originate in Asia, making the region a significant bridge between Asian inputs and finished products for the United States.

The United States aims for everything to be produced within the USMCA region, which requires Mexico to rebuild its domestic industry, as almost half of Mexico's industrial employment is within the maquiladora sector.

In Juárez, maquiladoras account for more than 70% of industrial employment, a trend that Mexico needs to reverse as the domestic industry has eroded due to the growth of this sector, according to Vázquez.

Labor conditions and compliance with union commitments are another key negotiation point.

A study by the Baker Institute for Public Policy indicates that a worker in the United States earns $307 a day, while the same job in Mexico pays only $32 a day.

The United States has invoked a Rapid Response Mechanism 48 times and prevailed in every instance, resulting in rising wages and benefits in Mexico.

U.S. Trade Rep. Jamieson Greer made it clear that Washington will seek greater benefits for U.S. manufacturers, farmers, ranchers, workers, service providers and companies. For Mexico, the negotiations put at stake millions of jobs, investments, exports, automotive plants, agricultural enterprises and industrial supply chains that depend on favorable USMCA conditions.

The automotive industry, once a source of pride in Juárez, could face new demands regarding component origin.

The steel and aluminum sectors will remain under scrutiny and agricultural producers will need to comply with stricter controls.

Mexican companies and maquiladoras may be required to prove their goods genuinely meet North American rules of origin; this third round will serve as a test of strength for both governments.

"Mexico needs to defend its exports and jobs, while the United States seeks to tighten rules and protect its own industry," said ANIERM delegate Vázquez. "Regardless of the negotiation outcomes, Mexico's path forward involves relearning to produce by revitalizing its industry, starting with simpler inputs like plastics, springs and screws, and developing technological capabilities to supply U.S. companies."

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