US tariffs could jeopardize $800 million of Mexican plastics exports

SAO PAULO (ICIS)–Potential US tariffs of 25% on all goods coming from Mexico could hit the country’s plastics sector hard, with exports to the US worth $800million, plastics sector trade group Anipac said this week.

• Around 75% of Mexican-produced plastics are sold to the US
• Mexico cabinet, companies hold breath as tariffs threat lingers
• Some analysts expect GDP to fall by up to 2.5% in 2025 if tariffs remain in place

The trade group’s positioning was published after Mexico and the US reached an agreement to put on hold the 25% tariffs for one month. Originally, they were expected to apply from 4 February.

Anipac lauded the Mexican government for achieving a partial success but warned that the threat of tariffs remains.

According to figures from the trade group, exports to the US represent 75% of all plastics produced in Mexico, but Mexco’s share of overall US plastics imports is only 2%.

“The [trade] tension and the result of the imposition of tariffs by our main trading partner will have a direct impact on a decrease in production, loss of formal jobs, and increase in production costs in the vertical integration of manufacturing sectors [in North America],” said Anipac, in a note signed by its president, Marlene Fragoso.

“We express our deep concern about President Trump’s strategy of imposing 25% tariffs on all imports of Mexican products as a strategy to put pressure on Mexico to resolve migration and fentanyl trafficking issues, regardless of the agreements under [North America trade deal] USMCA.”

Anipac praised the “timely and positive management” of Mexico’s federal government in “this first intervention”, but did not want to claim victory for good as tariffs may be a reality in a few weeks.

Moreover, corporate Mexico has been adjusting since November to the idea of a second Trump presidency in which import tariffs – as a strategy to exert pressure or as a reality – are likely to be a key part of the US-Mexico bilateral relationship for much of Trump’s second term in the White House.

“We remain in close communication with our peers in the US and attentive to the evolution of this issue,” said Anipac.

The trade group had not responded to a request for further comment at the time of writing.

One of the polymers which could be greatly affected by a 25% US import tariff would be polyethylene terephthalate (PET), one of the most widely used plastics. The US is a net importer of PET and product coming from Canada and Mexico would be hard to replace.

This, in turn, would push prices up, said market sources earlier this week, as any costs related to tariffs would be passed on to customers.

IMPORT TARIFFS TO WORSEN SLOWDOWN
US imports tariffs on Mexican goods would deliver a blow to Mexico’s economy.

While Mexican plastics producers send around 75% of their output to the US, the overall figure for the manufacturing sectors is 80%.

A 25% import tax on four-fifths of all goods made in Mexico sold in the US could send the country’s economy into a long and deep recession, most economists agree.

In fact,  Mexico’s GDP fell in the fourth quarter of 2024 by 0.6%, compared with the third quarter, while the petrochemicals-intensive manufacturing sectors started 2025 in contraction, the same way they ended 2024.

In a note published this week, Spanish bank BBVA, with important operations in Mexico, said the country’s GDP could fall by up to 2.5% in 2025 if tariffs are finally implemented and extend in time.

“What economic effects could these tariffs have on the US? The answer depends on various factors, among which the following stand out: the duration of the tariffs, possible tariff retaliations by Mexico and Canada, exchange rate adjustments and the spare capacity in the US to produce the goods that replace imports with the 25% tariff,” said BBVA Research.

“What economic consequences the tariffs would have for Mexico? The impact on investment, exports and competitivity could be very adverse. Therefore, there would be a significant downside risk to economic growth in 2025.”

MEXICO MANUFACTURING PMI INDEX
Last 12 months; reading below 50.0 points shows contraction

February 2024	52.3
March	52.2
April	51.0
May	51.2
June	51.1
July	49.6
August	48.5
September	47.3
October	48.4
November	49.9
December	49.8
January 2025	49.1

Source: S&P

Additional reporting by Bruno Menini

Focus article by Jonathan Lopez

Front thumbnail: Trucks at the US-Mexico border (Source: US National Association of Manufacturers (NAM))