Mexico has formally asked the Office of the United States Trade Representative to exclude it from an investigation into alleged “structural excess capacity” in the manufacturing sector. The probe was launched under Section 301 of the Trade Act of 1974 and seeks to determine whether certain economies have policies or practices that may burden U.S. commerce.
In its response, Mexico’s Economy Ministry argued that there is no legal or factual basis for keeping the country within the scope of the investigation. Mexican officials said manufacturing in Mexico, the United States and Canada is deeply integrated, particularly in industries such as autos, where parts and components often cross the border multiple times before becoming finished goods.
Mexico also warned that any unilateral action resulting from the investigation could disrupt North American supply chains, raise production costs, put upward pressure on consumer prices and lead to further manufacturing job losses. The government said such measures could also raise concerns over U.S. compliance with its commitments under the World Trade Organization and the USMCA.
As part of its argument, Mexico cited manufacturing employment data from both countries. Between February 2025 and February 2026, the United States lost 102,000 manufacturing jobs, while Mexico shed 111,347 positions. Mexican officials said the simultaneous decline shows that both countries are moving within the same manufacturing cycle, rather than Mexico expanding capacity independently from U.S. demand.
The USTR included Mexico and other economies in the investigation after pointing to possible signs of excess capacity in manufacturing sectors. In Mexico’s case, the agency cited the country’s goods trade surplus with the United States and the role of the automotive industry in exports.
The case comes amid broader trade tensions and a reassessment of regional economic integration. While the United States says it is seeking to protect its industrial base, Mexico argues that its manufacturing sector is part of a shared North American supply chain and that additional trade measures could undermine the region’s competitiveness.
Source: El Financiero
