Mexican GDP Outlook Dims as US Tariffs Impact Economic Growth Forecasts

Mexico

Mexican GDP outlook deteriorated significantly as the Institute of Finance Executives (IMEF) lowered 2025 growth forecasts for the fourth consecutive month due to escalating US tariff impacts. The Mexican GDP outlook now projects just 0.1% growth in 2025, down from 0.2% in April, 0.6% in March, and 1% in February, while 37% of survey respondents forecast economic contraction as trade restrictions increasingly affect Mexico's export-dependent economy.

Trade Disruptions Compound Economic Headwinds

Mexican GDP outlook reflects mounting challenges as effective tariff rates on Mexican exports exceed those imposed on Canada, Brazil, India, Vietnam, and other trading partners despite some US exemptions for goods meeting regional content requirements. IMEF economic studies director Victor Herrera warned that May trade data will likely reveal sharp declines in Mexican exports to the United States. Additional disruptions from screwworm outbreaks in cattle led to port closures and curtailed beef exports worth $1.3 billion annually.

Meanwhile, automotive sector concerns intensify as major manufacturers consider production relocations or scale-backs following Stellantis's confirmed plans to shift operations to the US. Reports suggest Nissan may close one or both Mexican plants, prompting Mexico to dispatch deputy economy minister Luis Rosendo Gutierrez to Tokyo for discussions with Mazda, Nissan, Toyota, and Honda executives. These developments threaten a cornerstone industry of Mexico's manufacturing economy.

Employment and Investment Climate Face Structural Pressures

However, employment forecasts reflect broader economic pessimism as IMEF reduced 2025 job creation projections to 200,000 from 220,000 in April. Mexico's social security administration reported only 43,500 new jobs over the past 12 months ending May 5th, highlighting labor market weakness. Constitutional reform uncertainty and potential US taxes on remittances create additional investment climate risks beyond trade policy challenges.

Therefore, monetary policy adjustments attempt to support economic activity despite inflation concerns. Mexico's central bank cut benchmark interest rates by 50 basis points to 9% on May 8th, marking the third reduction in 2025. IMEF projects year-end rates at 7.75%, down from previous 8% forecasts, while maintaining 2025 inflation expectations at 3.8% despite April's 3.93% consumer price index reading.

Currency Stability Masks Underlying Economic Vulnerabilities

Furthermore, peso exchange rate projections indicate modest weakening to Ps20.80/$1 by year-end compared to April's Ps20.90/$1 forecast. The peso recently strengthened to Ps19.34/$1, though Herrera attributed this movement to dollar weakness rather than peso strength. Currency stability provides limited comfort given underlying economic fundamentals deterioration across trade, employment, and investment indicators.

As a result, Mexico faces a challenging economic environment where tariff policies increasingly outweigh traditional competitive advantages in manufacturing and proximity to US markets. The confluence of trade restrictions, sectoral disruptions, and political uncertainties creates headwinds that monetary policy accommodation may struggle to offset entirely through 2025.

The Metalnomist Commentary

Mexico's rapidly deteriorating GDP outlook exemplifies how trade policy shifts can fundamentally reshape economic trajectories for manufacturing-dependent economies, particularly those integrated into North American supply chains. The automotive sector's potential restructuring represents a critical inflection point for Mexico's industrial base, while the increasing tariff burden highlights the vulnerability of export-oriented economies to protectionist policy changes in major destination markets.

Mexico's Auto Industry Struggles with US Tariffs Despite USMCA Exemption

Mexico Car Tariffs

Despite the recent decision by US President Donald Trump to pause reciprocal tariffs on several nations, Mexico's automotive industry continues to face significant challenges. The 25% tariffs on exports of automobiles, steel, and aluminum, announced last month, remain in place. These tariffs, coupled with Trump's global 25% tariff on auto imports, continue to impact Mexican carmakers.

USMCA Exemption Still Leaves Uncertainty

Mexico and Canada do benefit from an exemption in the US-Mexico-Canada Agreement (USMCA) for imports that comply with regional content rules. However, the specifics of how this exemption will be implemented remain unclear. Mexico is still in negotiations with the US to eliminate or reduce the tariffs in certain cases.

Gabriel Padilla, head of the Mexican auto parts association INA, explained that their primary focus is to extend the tariff application to auto parts covered by the USMCA. He stressed the importance of demonstrating the integration levels by component grade to show what is beneficial for both countries. According to a recent INA study, the US’s 25% tariffs on steel and aluminum could cost auto parts companies $2.94 billion more in additional costs.

Negotiations and Uncertainty Continue

Despite ongoing negotiations, the uncertainty surrounding the tariffs is causing some companies to pause exports while awaiting clarity. Rogelio Garza, president of the Mexican automaker association AMIA, mentioned that some companies are hesitant to continue shipments until the impact of the tariffs becomes clearer. He expects more concrete definitions regarding the auto tariffs within the next two months.

Garza also pointed out that the paused shipments contributed to a 6% decline in Mexican auto exports to the US in the first quarter, as reported by the national statistics agency Inegi. The total exports fell to 775,886 units, down from the previous year's figures.

Conclusion: A Time of Adjustment for Mexico’s Automotive Sector

The automotive industry in Mexico faces a period of uncertainty as it continues to navigate the effects of US tariffs. While the USMCA exemption provides some relief, the lack of clarity on its implementation and ongoing negotiations leave many carmakers in a state of flux. The situation is further complicated by the high costs imposed by the tariffs on steel, aluminum, and auto parts. As negotiations unfold, the next couple of months will be critical for determining the future of the Mexican automotive sector.

Mexico’s Trade Deficit Surges in August Amid Rising Imports and Export Challenges

Mexico’s trade deficit reached $4.87 billion in August 2024, a sharp increase fueled by heightened imports and slowing demand for manufacturing exports. This August figure vastly exceeded June’s deficit of $72 million, according to final data from Mexico’s national statistics agency, Inegi. For the first eight months of 2024, the country’s trade deficit totaled $10.44 billion, up from $8.43 billion during the same period last year.

The widening deficit reflects stronger domestic demand for non-oil consumer goods, while a weaker North American manufacturing sector weighed on Mexico’s manufacturing exports. “Strong domestic demand boosted imports of non-oil consumer goods, while the weak North American manufacturing sector hurt Mexican manufacturing exports,” commented Alejandro Cervantes, head of quantitative research at Banorte.

Oil and Non-Oil Trade Divide

Inegi’s trade data separates Mexican trade into "oil" and "non-oil" categories. Oil encompasses crude oil, natural gas, and petrochemicals, while non-oil includes exports such as vehicles, agricultural goods, and minerals. In August, seasonally adjusted exports fell 2.8% from July, totaling $54.8 billion. Oil exports decreased by 4.1% to $2.25 billion, while non-oil exports declined by 2.7% to $49.7 billion.

Crude exports, valued at $1.72 billion, saw an average price of $72.24 per barrel, down from $74.86 in July and $76.88 in August 2023. Volumes also dropped to 716,000 barrels per day, down from 817,000 barrels in July and 1.11 million barrels a year earlier.

Imports, meanwhile, rose 3.4% in August to $56.8 billion, driven by a 5.4% increase in oil imports and a 3.2% rise in non-oil imports. Banorte analysts anticipate a potential slowdown in imports as costs rise and the export outlook remains uncertain. The depreciation of the Mexican peso since June, from Ps16.31 to Ps19.49 against the U.S. dollar by October 10, could stimulate exports but is likely to dampen import demand, particularly for consumer goods.

Mexico’s GDP Outlook Brightens for 2024 Amid Economic Adjustments

Mexico

Private-sector analysts have slightly raised Mexico's GDP growth forecast for 2024 to 1.6%, up from 1.53% in the central bank’s final survey of the year. This revision follows the Mexican statistics agency Inegi's adjustment of third-quarter GDP growth to 1.6% from 1.5% in November, signaling a modest but positive trend for the country’s economy.

Mixed Forecasts for 2025 and Beyond

While 2024 projections showed a slight improvement, the 2025 GDP forecast has dipped to 1.12%, down from 1.2% in November. This forecast lags behind the central bank's projection of 1.2%, reaffirmed during its recent quarterly presentation. The central bank highlighted potential risks stemming from geopolitical uncertainties and evolving US-Mexico trade policies, which could affect the broader economic outlook.

For the first time, the December survey introduced 2026 projections, forecasting a modest GDP growth of 1.8%, alongside an easing of headline inflation to 3.7%. Analysts anticipate the Mexican peso exchange rate will reach Ps21/$1 by the end of 2026, reflecting gradual depreciation.

Monetary Policy and Exchange Rate Adjustments

Mexico’s central bank is expected to implement a 25-basis-point rate cut on 19 December 2024, reducing the target rate to 10%. Analysts forecast further reductions, with the target rate potentially declining to 8% by the end of 2025. For 2026, the central bank is expected to moderate its rate cuts, settling at 7.5% by year-end.

The December survey also included updated exchange rate forecasts, predicting the peso will trade at Ps20.25/$1 by the end of 2024, slightly stronger than the Ps20.29/$1 estimate from November. For 2025, the exchange rate is projected at Ps20.53/$1, a marginal adjustment from the previous Ps20.59/$1 forecast.

Key Economic Drivers

Several factors are shaping Mexico’s economic trajectory:

1. Monetary Policy: The anticipated rate cuts aim to stimulate economic growth while balancing inflationary pressures.
2. Geopolitical Risks: US-Mexico trade dynamics and global uncertainties continue to influence forecasts.
3. Currency Stability: The peso's relatively stable outlook reflects confidence in Mexico’s economic management and its trade relationships.

While near-term growth remains modest, the introduction of 2026 projections highlights the potential for a more stable economic environment, supported by easing inflation and a favorable monetary policy stance.

Mexico Steel Import Restrictions Tighten as Government Purges Foreign Suppliers

Mexico Steel

Over 1,000 Steel Suppliers Face Removal Amid Triangulation Concerns

Mexico steel import restrictions are intensifying as the government moves to purge 1,062 foreign suppliers from its official registry. The Ministry of Economy uncovered irregularities in over 47% of registered foreign steel firms, with many found to be non-existent or misrepresented. Authorities are conducting site inspections in six countries, including Malaysia.

Anti-Tariff Triangulation Drives Trade Crackdown

The move aims to prevent tariff circumvention practices, especially the rerouting of Chinese steel through Mexico to access the U.S. duty-free. Mexico steel import restrictions follow U.S. accusations of trade triangulation and recent tariff increases under former President Donald Trump. Despite exemptions under USMCA, Banco BASE estimates Mexico faces a 19.51% effective tariff rate on goods entering the U.S.

Domestic Steel Use to Rise in Energy Infrastructure

Mexico’s government is pushing for more domestic steel usage in national energy projects. The state utility CFE plans to increase the use of Mexican steel in transmission towers from 30% to 60% by 2030. However, limited domestic suppliers for turbines and generators remain a bottleneck. Engineers are consulting on integrating Mexican-made cable and steel into upcoming infrastructure.

The Metalnomist Commentary

Mexico’s regulatory push highlights a broader shift toward trade transparency and domestic industrial development. The steel sector will feel immediate impacts, but long-term resilience hinges on capacity-building within Mexico’s heavy equipment supply chain.

USMCA extension under scrutiny as Mexico pushes to keep pact alive

Marcelo Ebrard

Mexico is working to secure a USMCA extension even as Trump questions the pact’s value and raises uncertainty. Mexican officials frame the USMCA extension as essential to protecting manufacturing supply chains that link Mexico, the US and Canada. For investors and manufacturers, the USMCA extension will determine how predictable North American trade rules remain over the next decade.

USMCA extension review will shape North American trade stability

Mexico’s economy minister says negotiators are progressing on the scheduled USMCA review, aiming to conclude the process by 1 July. This review could unlock a 16-year USMCA extension if all three governments agree. However, failure to secure that commitment would push the agreement into annual reviews, which would inject ongoing political risk into trade and investment planning.

The USMCA replaced NAFTA in 2020 and now underpins a large share of Mexico’s export-led growth. Trump’s recent comments that the pact offers “no real advantage” signal possible resistance to a smooth USMCA extension. As a result, companies in autos, energy and manufacturing must factor in scenarios where tariff policy changes more frequently, even if the core agreement nominally survives. Analysts also expect some tariffs on Mexican exports to remain in place whether or not a full 16-year USMCA extension is agreed.

Security tensions complicate the path to a USMCA extension

Security and migration tensions now overlap with the economic debate around the USMCA extension. The US has pressed Mexico to show faster progress on disrupting trafficking networks and fentanyl flows. After a call between the two foreign ministers, both sides reaffirmed the strategic importance of the partnership, yet Washington publicly called “incremental progress” on border security unacceptable.

Meanwhile, threats of possible US military action against criminal groups in Mexico have raised political sensitivity in Mexico City. President Sheinbaum has publicly ruled out any US military intervention after what she described as a “good conversation” with Trump. These tensions create a more fragile backdrop for the USMCA extension process, since domestic politics in both countries can quickly spill over into trade negotiations.

The Metalnomist Commentary

The USMCA extension is becoming a litmus test for how North America manages the intersection of trade, security and domestic politics. Even if the treaty survives in its current form, the drift toward more conditional and frequently reviewed trade rules will raise the cost of capital and encourage companies to diversify risk within the region. For metals and industrial supply chains, boardrooms should treat the USMCA extension not as a given, but as a scenario that must be actively hedged.

Trump's Executive Order Seeks to Revive U.S. Shipbuilding and Combat China's Maritime Dominance

U.S. Shipbuilding

New Maritime Action Plan to Prioritize Shipbuilding, Workforce Development, and Infrastructure Overhaul

President Donald Trump has signed a sweeping executive order aimed at reviving the U.S. maritime industry and shipbuilding sector. The order focuses on public-private investments, long-term funding, and strategic policy reforms to reduce reliance on foreign-built vessels—particularly those from China.

The executive order mandates key federal agencies—including the Department of Defense, Homeland Security, and the U.S. Trade Representative—to submit a comprehensive Maritime Action Plan (MAP) within seven months. This MAP will outline actionable steps to strengthen domestic shipbuilding, ship repair, port infrastructure, and the maritime workforce.

A centerpiece of the plan is the creation of a maritime security trust fund. This fund will ensure stable financing for infrastructure modernization and shipyard upgrades. Moreover, it will support workforce training programs and offer financial incentives to boost domestic shipbuilding capacity.

Additionally, the Department of Homeland Security must propose new legislation to counter regulatory circumvention. Companies routing cargo through Canadian or Mexican ports to avoid U.S. laws may face added Customs and Border Protection (CBP) fees.

Another innovative policy under the order is the establishment of Maritime Prosperity Zones. These zones, including one proposed in the Great Lakes region, will serve as hubs for maritime economic growth and innovation.

In a further effort to challenge China’s dominance in global shipping, the executive order supports proposals by the USTR to impose docking fees on Chinese-built vessels or their owners. While intended to level the playing field, these measures raise concerns among U.S. industries about increased costs and the practical hurdles of rebuilding a competitive domestic shipbuilding base.

The executive order represents one of the most aggressive policy pushes in decades to reassert U.S. leadership in maritime manufacturing and logistics. Yet, its success will depend heavily on how effectively agencies implement the MAP and secure bipartisan support for legislative changes.

Aludyne Linamar auto parts deal reshapes North American chassis supply

Aludyne

The Aludyne Linamar auto parts deal marks a significant reshaping of North America’s chassis and structures supply chain. Aludyne will sell most of its North American precision casting, machining and manufacturing plants to Linamar for $300mn, with closing expected within 30 days. The transaction transfers a broad footprint of Tier 1 assets at a time when the regional automotive sector faces EV uncertainty and capacity rebalancing. As a result, the Aludyne Linamar auto parts deal strengthens Linamar’s position with OEMs while allowing Aludyne to exit capital-intensive operations.

Linamar deepens chassis portfolio with Aludyne plants

The Aludyne Linamar auto parts deal will fold Aludyne’s US and Mexican plants into Linamar’s structures and chassis division. Linamar gains established North American production of knuckles, subframes, control arms and axle housings, all core safety-critical components. This expansion enhances Linamar’s ability to offer integrated chassis solutions, which helps automakers rationalise suppliers and reduce logistics complexity.

Meanwhile, the Aludyne assets complement Linamar’s recent move into Europe through the purchase of George Fischer’s iron foundry in Leipzig. Together, these acquisitions expand Linamar’s geographic and product reach across cast and machined suspension and structural parts. Therefore, the company positions itself as a global Tier 1 partner able to support multi-platform programmes across internal combustion, hybrid and battery electric vehicles.

EV headwinds force rethink of giga-casting strategy

At the same time, Linamar is trying to divest its aluminium die giga-casting plant in Welland, Ontario, completed in 2024. That facility was originally designed to make large structural castings for EV platforms, targeting long-term supply to major OEMs. However, the end of US EV tax credits under President Donald Trump has weakened demand visibility for high-volume EV structures. This shift explains why the Aludyne Linamar auto parts deal now looks more attractive than betting solely on giga-casting growth.

As a result, Linamar appears to be pivoting back toward a diversified mix of cast and machined chassis parts, with less exposure to a single EV-heavy technology bet. The acquisition balances risk by anchoring the group in essential underbody and suspension components that remain necessary across all powertrains. For automakers, a stronger Linamar could offer greater resilience in North American sourcing, even as EV policy volatility complicates long-term platform planning.

The Metalnomist Commentary

The Aludyne Linamar auto parts deal underlines how policy-driven EV headwinds are reshaping capital allocation in the auto supply chain. Tier 1 suppliers are moving away from single-technology bets toward diversified portfolios of foundational components and regional footprints. For metals suppliers and casting houses, the key will be aligning product mix with flexible, multi-powertrain platforms rather than relying on overly optimistic EV adoption curves.

Carpenter Prioritizes Profit, Reduces Alloy Sales

Carpenter Technology

Carpenter Technology sold fewer alloys in its fiscal second quarter, focusing on higher-profit aerospace markets. This strategic shift led to nearly doubled profits despite reduced sales volumes.

Profit-Driven Sales Strategy Impacts Volumes

Alloy sales across all segments reached 46.2mn lb, down from 49.1mn lb year-on-year. The specialty alloys segment saw a 5.4mn lb decline, totaling 44.7mn lb. However, profits nearly doubled to $84.1mn. This reflects the company's focus on high-margin aerospace and medical products over lower-margin transportation and industrial products. CEO Tony Thene emphasized, "I am not trying to maximize tons. I'm trying to maximize profit." Aerospace sales rose to $334mn from $247mn, while other end-market sales declined.

Future Profit Growth and Capacity Utilization

Furthermore, Carpenter forecasts profits of $126mn-134mn for the fiscal third quarter, a 77pc year-on-year increase. This growth is expected from the performance engineered products segment, including Dynamet titanium, additives, Latrobe, and Mexican distribution. Carpenter plans to maintain 100pc capacity utilization, citing Boeing and Airbus build rate expectations. The company anticipates increased volumes over the next two years, driven by sustained aerospace demand.

Peru boosts Grupo Mexico's 2Q Cu, Zn output

Mining and transport conglomerate Grupo Mexico boosted its copper production in the second quarter this year, driven by increases in its Peruvian and Mexican operations.

The company produced 270,750 metric tonnes (t) of copper in the second quarter, up by 4.7pc from the year earlier period. The firm produced 538,740t in the first half, a 5.3pc increase from the same period in 2023.

The increase reflects increased copper production in Peru, as well as higher output at its Buenavista zinc concentrator in Mexico.

"Higher [copper] production in Mexico was partially offset by a decrease in [Arizona-based US subsidiary] Asarco's production," Grupo Mexico said.

Total copper sales in the quarter increased by 2.5pc to 260,050t from a year earlier.

The company resumed its Tia Maria copper project in Peru in July this year and said it expects to produce 120,000 t/yr of solvent extraction and electrowinning copper cathodes when it starts operations in 2027.

The company produced 29,420t of zinc in the second quarter, up by nearly 71pc on the year, also driven by the Buenavista Zinc concentrator. Zinc sales rose by 78pc to 39,000t.

Molybdenum production in the second quarter rose by almost 21pc to 7,655t from the prior-year period, while sales increased by 21pc to 7,640t.

The production and sales hikes came with higher average prices for the metals, the company also said.

Average zinc prices of $1.29/lb in the second quarter were up by 12pc from the same three-month span in 2023, based on London Metal Exchange numbers.

The average copper price of $4.55/lb in the second quarter was 18pc higher than the prior-year period, according to Comex figures cited by Grupo Mexico.

Second quarter total profits rose by nearly 60pc to $1.06bn on the year, with revenues increasing by 27.4pc to $4.4bn in the same period.

US Pressures Mexico for Early Renegotiation of USMCA: A Strategic Move for the Future

US, Mexico

The Trump administration is pushing for an early renegotiation of the US-Mexico-Canada Agreement (USMCA), potentially as soon as this year. This could offer an opportunity to strengthen the commercial relationship between the three countries. According to Kennet Smith, a partner at consultancy Agon, this move is crucial for Mexico, which faces the challenge of navigating tariff tensions while preparing for future renegotiations. The immediate focus on the USMCA renegotiation could also bring long-term benefits to Mexico if handled strategically.

Tariff Concerns and Opportunities for Mexico

The recent series of tariffs announced by President Donald Trump, particularly on April 2 during what he referred to as "Liberation Day," had an interesting effect on the Mexican economy. The peso initially reacted positively, as Mexico was largely shielded from the new tariffs due to the protections within the USMCA.

Mexico's President, Claudia Sheinbaum, chose a strategy of not retaliating against Trump's tariffs. Instead, her administration has focused on working with the US on critical issues such as immigration, drug trafficking, and security. This approach has helped Mexico avoid a full-fledged tariff war. However, Smith notes that Sheinbaum’s administration needs to prepare for potential changes to the USMCA, such as coordinated action against imports from China, which could lead to new tariffs on Chinese imports entering Mexico.

Mexico's Strategy Moving Forward

Despite the challenges, Mexico has options to gain leverage during the renegotiation process. Smith suggests that Mexico could initiate a consultation process under the USMCA rules to address potential violations, particularly related to Trump's tariffs on steel, aluminum, and auto parts. Under the agreement, tariffs on these items have been increased from 2.5% to 25%, which Smith views as a violation that could be contested in the renegotiation talks.

Furthermore, Mexico could stand to benefit from the evolving tariff war. If the dispute continues, Mexico might be able to secure exemptions from these tariffs under a renegotiated USMCA, encouraging foreign companies to shift their manufacturing operations to Mexico. This could lead to a revival of nearshoring trends, which would bolster Mexico’s manufacturing sector.

Domestic Challenges Facing Mexico

While international opportunities may arise from the renegotiation of the USMCA, Mexico must also address its domestic issues. Valeria Moy, director of IMCO, highlighted that Mexico's attractiveness as an investment destination has been undermined by recent domestic reforms. These include changes to the energy sector, the removal of independent regulators, and the restructuring of the judicial power. Such actions have created uncertainty in Mexico’s business environment, which could deter foreign investments and undermine efforts to attract manufacturers from abroad.

Conclusion

The Trump administration's pressure for early USMCA renegotiation presents both challenges and opportunities for Mexico. While Mexico has managed to avoid the worst effects of the tariff war, it must remain vigilant in securing its interests during renegotiation talks. At the same time, Mexico must address internal reforms to ensure it remains a competitive and attractive destination for international investment.

Strike Action Forces Suspension of Operations at Mexico’s Tizapa Mine

Mexico’s Tizapa

Labor dispute leads to indefinite halt in zinc and metal production

Mexican mining company Industrias Penoles has announced an indefinite suspension of operations at its Tizapa mine in the State of Mexico due to strike action initiated by the national mining union. The union claims that Penoles violated a collective labor agreement signed in April. In response, Penoles intends to pursue legal and administrative avenues to address the issue.

Ownership and Production Details

Penoles holds a 51% stake in the Tizapa mine, which extracts zinc, copper, lead, silver, and gold. Japanese companies Dowa and Sumitomo respectively own 39% and 10% of the mine. The zinc concentrate produced at Tizapa is sent to Dowa's zinc smelter in Akita, Japan. Last year, Tizapa produced 41,463 tons of zinc, 1,332 tons of copper, and 8,821 tons of lead.

Trade Tensions Derail BYD’s Mexico EV Plant Plan

BYD

Sheinbaum confirms no formal investment; U.S. tariffs undermine Chinese automakers’ North American strategy

BYD Faces Setback Amid Growing US-Mexico Trade Pressure

BYD’s plan to build a major EV manufacturing plant in Mexico appears to be falling apart due to escalating trade tensions. Mexico’s President Claudia Sheinbaum confirmed this week that BYD never made a formal investment commitment. This comes amid U.S. concerns that Chinese automakers are using Mexico to circumvent 100% tariffs on Chinese-made cars.

Sheinbaum emphasized that Mexico's trade priorities lie firmly within the USMCA framework and its alliance with the U.S. and Canada. “As we've said, you can invest in Mexico, but we take our trade commitments into consideration,” she said.

BYD’s Mexican Market Claim Met With Skepticism

In 2023, BYD expressed interest in building a plant to produce 150,000 cars annually and generate 10,000 jobs. As recently as mid-2024, it planned to announce a location by the end of the year. However, trade analysts had long cast doubt on the project’s viability, citing the U.S. tariff wall.

BYD executives insisted the plant would serve Mexico’s domestic market, not the U.S.

Still, industry experts like Herrera noted the project had little chance of bypassing U.S. protectionist measures. The situation reflects how geopolitics increasingly affects EV supply chain strategies across North America.

The Metalnomist Commentary

BYD’s withdrawal from Mexico marks a growing friction point between China’s EV ambitions and America’s industrial policy. For Mexico, balancing between Chinese investment and USMCA loyalty will define its strategic value in the clean-tech era.

As the global EV race intensifies, regulatory alignment and tariff policy may matter just as much as technology and capital.

US Antimony Secures Antimony Ore Supply from Thailand for Mexico Smelter Restart

USAC

US Antimony (USAC) has secured a new antimony ore supply agreement with a supplier in Thailand to support the restart of its Madero smelter in Mexico. The Texas-based company announced that the first shipments, totaling 50 wet metric tonnes (wmt), will arrive at Manzanillo port on Mexico’s west coast in March 2025. This deal is part of USAC’s broader strategy to re-establish its Mexican operations after shutting them down in early 2024 due to profitability concerns.

USAC’s Expansion Amid Rising Demand for Non-China Antimony

USAC’s agreement with Thailand marks its second antimony supply deal this month, as the company works to secure alternative sources of the critical metal. The firm has not disclosed the total contract volumes or the identity of its supplier but has indicated that ore shipments are expected to increase significantly in the coming months.

The timing of USAC’s expansion coincides with rising market demand for antimony sourced outside of China. China, the dominant supplier of the metal, recently suspended exports of antimony to the US, prompting companies to seek alternative sources. As a result, USAC has accelerated plans to restart its Madero smelter, which is currently undergoing maintenance and refractory lining replacements.

Market conditions have also been favorable for USAC’s decision. Antimony prices have surged, with 99.65% antimony recently assessed at $18.10-$18.30 per pound CIF US, representing an astonishing 256% increase compared to the previous year.

USAC Strengthens Financial Position with $100 Million Shelf Offering

To support its expansion efforts, USAC has also filed for a $100 million shelf offering, which will provide liquidity flexibility over the next three years. This move, pending regulatory approval, will allow the company to sell securities to raise capital when needed, ensuring it has the financial resources to scale up operations and secure long-term supply agreements.

Conclusion

As China’s export restrictions on antimony continue to reshape global supply chains, USAC is positioning itself as a key supplier by sourcing antimony ore from Thailand and restarting its Madero smelter. With stronger market demand, soaring antimony prices, and a new financing strategy, USAC is well-placed to capitalize on the shifting dynamics of the antimony market.

US Antimony Montana mining advances with new claims and smelter expansion

US Antimony Montana Mining

US Antimony Montana mining accelerates as the company reacquires claims near its Montana smelter. It will start mining immediately on five acres. It will seek federal and state permits to expand exploration. The move aligns mining with adjacent midstream capacity.

Permits, smelters, and production scale

The company operates North America’s only two antimony smelters. It restarted the Madero smelter in April. It plans to expand the Montana smelter six-fold to 300 t per month. These steps strengthen feed-to-smelter integration.

Supply security and market backdrop

US Antimony aims to secure domestic stibnite ore and reduce import risk. China recently blocked a stibnite shipment from Australia. Therefore, the firm is reshoring supply to support its Mexican and US smelters. This strategy improves control across midstream and downstream steps.

Meanwhile, new Montana claims complement operations in Alaska acquired in February. The portfolio now spans mining, smelting, and processing. US Antimony Montana mining thus underpins a broader North American network. That network targets defense, flame retardants, and lead-acid batteries.

The Metalnomist Commentary

If the Montana expansion delivers, domestic supply security will improve across North America. Watch permit timing, mine productivity, and smelter bottlenecks as capacity scales.

USAC Expands Antimony Operations in Alaska Amidst Global Supply Chain Shifts

Antimony

Texas-Based Miner Secures New Claims to Strengthen North American Antimony Supply

Texas-based US Antimony (USAC) has taken a significant step to bolster its operations by securing a new set of antimony mining claims in Alaska. This move, facilitated through a $5.25 million option agreement, is strategically aimed at diminishing the Western supply chains’ reliance on Chinese antimony sources.

USAC's recent agreement allows them to explore 120 new claims across approximately 17,900 acres in Alaska. This development is built on historical data indicating the presence of near-surface antimony with high values, promising substantial yields for the company.

The financial structure of this deal involves staged payments of $3 million and exploration commitments worth $2.25 million over five and a half years. Additional aspects of the agreement include a net smelter royalty and potential for third-party joint ventures, highlighting a comprehensive plan to maximize resource extraction.

Building on a Robust Foundation in Alaska

Prior to this agreement, USAC already held significant interests in Alaska, with 93 claims spanning 14,880 acres acquired in 2024. The company plans to extend its exploration efforts through a dedicated field program aimed at assessing the potential of these new claims.

Further solidifying its North American presence, USAC is also advancing its smelting operations. This includes securing ore for its Mexican smelter, which is slated for a restart, and a collaborative deal with Perpetua Resources to process concentrate from the Stibnite antimony-gold project in Idaho.

Responding to Global Market Dynamics

These expansions come in direct response to China’s tightened export controls on antimony, including a complete ban to the U.S. as of last December. These restrictions have significantly impacted global supplies and resulted in increased antimony prices, making USAC’s expansion a timely strategic move.

U.S. Solar Power Hits Record Growth in 2024 Despite Policy Uncertainty

Wood Mackenzie

Utility-scale solar leads capacity surge as residential segment contracts; industry braces for regulatory headwinds in 2025.

The U.S. solar sector added nearly 50,000 MWdc of capacity in 2024, setting a new record and growing 21% year-over-year, according to a joint report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. Solar energy accounted for 66% of all new power generation, surpassing its previous high of 56% set in 2023.

This marks the fourth consecutive year solar has held the largest share of new U.S. generation, driven by Inflation Reduction Act (IRA) incentives, resilient supply chains, and strong demand from utilities and corporations.

Utility-Scale Leads Surge, But Residential Slumps

Utility-scale solar led the boom, adding 41,100 MWdc—a 33% increase from 2023. However, 2025 may see a 2% contraction in this segment due to policy uncertainty.

The residential solar market declined 31% to 4,700 MWdc, hit by high financing costs and lower demand. Still, 9% growth is expected in 2025, especially in California, where market stabilization is underway.

Commercial installations rose 8% to 2,100 MWdc, fueled by projects under California’s NEM 2.0, but are expected to drop 11% in 2025. Developers face federal compliance hurdles related to wage and apprenticeship rules tied to tax credits.

Growth in Community Solar, But Headwinds Ahead

Community solar jumped 35% to nearly 1,750 MWdc, though 2025 growth could fall 15% due to interconnection issues and saturation in mature states.

While demand remains strong, looming policy risks threaten momentum. These include:

• Tariff hikes on Canadian and Mexican imports set for April 2

• A 60-day freeze on permitting for federal land projects

• A shift in federal focus toward thermal and hydro energy

Despite these risks, SEIA and Wood Mackenzie forecast a minimum of 43,000 MWdc per year through 2035, pushing cumulative capacity beyond 730,000 MWdc. However, that pace could slow by 25% if key IRA tax incentives are removed or diluted.