COVID’s Impact On Cross-Border Remittances And The Rise In Digital Payments

If you send money to Mexico to support loved ones or pay vendors, changes in tariffs directly affect you. In 2024, Mexico received a record $64.7 billion in remittances from the US. But new US tariffs on Mexico in 2025 are shifting the rules of trade. And yes, they could affect the amount your loved ones actually receive.These tariffs, tied to both trade and security policies, are already influencing exchange rates and transfer costs. A new 30% tariff on Mexican imports takes effect in August 2025, and the Mexican peso is feeling the heat.That’s why now’s the time to be smart about how you send money to Mexico. In this guide, we’ll break down the current US tariffs on Mexico, examine their impact on remittances, and show how tools like the CompareRemit exchange calculator can help you stretch every dollar further.What’s the Latest on US Tariffs on Mexico in 2025Tariffs have always shaped US-Mexico trade, from NAFTA to the USMCA. But summer 2025 has brought major shifts. Here’s a round-up:New 30% tariff starts August 1: On July 12, US President Donald Trump announced that all imports from Mexico will face a 30% tariff, up from 25%. This follows failed negotiations and was confirmed via official channels and social media.USMCA exemptions uncertain: It’s still unclear if the new 30% tariff will exempt USMCA-compliant goods. Businesses are awaiting formal guidance.Sector duties remain: Non-compliant auto parts and vehicles continue to face a 25% tariff. Steel imports are subject to a 25% tariff. Aluminum imports from Mexico now face a 25% tariff as of March 12, 2025, replacing the previous 10% rate under Section 232. Select produce, such as tomatoes and other non-compliant agricultural products, continues to face increased duties. Energy and potash imports remain subject to a 10% tariff if non-compliant.No retaliation from Mexico (yet): Mexico has not responded with tariffs. Instead, it continues high-level talks with the US to protect its economy.Binational working group formed: A permanent task force now manages trade, migration, and economic coordination between the two governments.Underlying drivers: The US cites national security, fentanyl trafficking, migration, and a $152 billion trade deficit with Mexico as justification.With the August 1 deadline past us, uncertainty looms if things will improve. If USMCA exemptions are revoked, a large share of Mexico’s $600 billion in exports could be affected. Businesses are preparing for higher costs and possible supply chain disruptions.The Impact of US Tariffs on Mexico in 2025Let’s get specific. The impact of US tariffs on Mexico is being felt across exports, inflation, jobs, and remittances. Here’s what’s affected:Exports: Roughly $300 billion in non-compliant Mexican exports now face 25% tariffs. Mexico’s overall export volume could fall by 10–15%, with the auto and electronics industries hit hardest. If these measures persist, they may drag down Mexico’s GDP in 2025.Inflation: In the US, vehicles subject to tariffs are priced up to $4,700 higher, with many models seeing increases in the $4,000 to $5,000 range depending on their supply chains and import content. Food prices in Mexico, particularly for staples like avocados and tomatoes, are rising due to higher import costs and a weaker peso, which are fueling broader consumer inflation.Jobs: Stellantis and other automakers have cut US jobs and paused production in Mexico due to new tariffs. About 900 US workers were temporarily laid off, and operations at the Toluca plant in Mexico were halted. These moves are driving up costs and cutting output for manufacturers and small businesses on both sides of the border. Sectors like manufacturing, agriculture, and construction are also facing higher costs and uncertainty.Exchange rates: The peso has weakened through 2025. As of July 22, it trades at 18.68 per USD, fluctuating between 18.55 and 18.75. While this boosts remittance value, it also raises import prices and fuels inflation in MexicoTariffs and currency trends are evolving fast. Comparing rates and using tools like CompareRemit’s exchange rate calculator can help you get more pesos for every dollar sent.How Tariffs Affect Remittances to MexicoThe impact of the US tariffs on Mexico can hit households, too. Here’s what’s happening:Remittances are becoming more essential due to rising costs and job losses.A weaker peso gives recipients more value per dollar.But inflation erodes that value, and planning becomes difficult when rates swing often.For example, if you send $1,000 at 18.5 MXN/USD, your recipient gets 18,500 pesos. At 19 MXN/USD, they get 19,000 pesos. That’s a 500 peso difference and is worth watching.Will You Have to Pay More to Send or Receive Money?Let’s look at the bottom line. Will these tariffs hit your wallet directly? Possibly. Not from a direct fee hike, but due to spillover effects like:Money transfer companies may increase fees to manage risk.Banks charge $15–$50 per wire. Remittance services average $0–$15.Mexico may raise local taxes to recover revenue losses from reduced trade.Here's what you can do:Compare exchange rates on CompareRemit.Set alerts to catch the best timing.Use low-fee methods like mobile wallets or cash pickup.Here’s a comparison of transfer methods to Mexico:MethodSpeedFeesConvenienceBest forRemittance ServicesMinutes to 1 day (cash pickup/bank deposit)$0–$15 (bank-funded), $10–$30 (card-funded)Easy online/app process with trackingPersonal remittances, urgent transfersBank-to-bank transfer1–5 business days$15–$50 (SWIFT fees)Requires bank detailsBusiness or recurring paymentsMobile walletsInstant to hours$0–$5 (may include withdrawal fees)App-based; the recipient needs a walletSmall, tech-savvy transfersCash PickupMinutes to hours$5–$15ID and reference number neededRecipients without bank accountsMany money transfer services offer competitive rates and fast delivery. Check CompareRemit’s reviews to find reputable providers tailored to your needs, especially with the impact of the US tariffs on Mexico affecting exchange rates.What to Watch Out for in the Coming MonthsThe current US tariffs on Mexico may shift soon. Keep an eye on:USMCA renegotiations: The 2026 review could bring tighter rules of origin or new tariff terms. Any change may impact trade and remittance flows, especially with exemptions under debate.Election-year rhetoric: Tariff talk is heating up. A new 30% tariff kicks in on August 1, 2025, and ongoing political messaging is adding uncertainty and fueling market instability.New duties ahead: Sectors like lumber and pharma may be next. This could expand the tariff burden beyond autos, steel, and agriculture, raising costs and disrupting supply chains.Stay informed by following updates from official sources like the USTR and trade.gov, as well as market coverage from leading news services, to help you navigate the shifting landscape.The impact of US tariffs on Mexico may create challenges, but they don’t have to diminish your remittances. By understanding their economic impact and comparing money transfer options, you can ensure your money reaches Mexico without hassle.Use the CompareRemit USD to MXN exchange rate calculator to find the best exchange rates, lowest fees, and fastest transfer times. Your hard-earned dollars deserve to make the maximum impact. Don't let policy shifts eat into your remittances; save more pesos with every dollar using CompareRemit’s tools.Frequently Asked Questions (FAQs)Q: What are the Current US tariffs on Mexico in 2025?A 25% tariff applies to non-USMCA-compliant imports. Energy and potash imports face a 10% duty. USMCA-compliant goods are exempt. Starting August 1, 2025, tariffs on certain goods are set to increase to 30% unless further policy adjustments are announced.Q: Why has the US increased tariffs on Mexican goods?To address a $152 billion trade deficit, reduce fentanyl trafficking, control illegal migration, and encourage domestic production.Q: How do US tariffs on Mexico affect the USD to MXN exchange rate?Tariffs have contributed to a weaker peso by raising economic uncertainty. This increases remittance value in local currency but also raises the cost of goods in Mexico due to higher import costs and inflation. As of July 22, 2025, USD/MXN trades around 18.68.Q: Will remittance costs go up due to the new tariffs?Not directly. However, money transfer providers or apps may raise service fees or widen exchange rate margins to manage increased market risk. It’s wise to compare options regularly to keep transfer costs low.Q: What industries in Mexico are most affected by the US tariffs on Mexico?Auto, steel, aluminum, and agriculture are the most impacted sectors by the recent tariff measures, with additional discussion of expanding duties to sectors like lumber and pharmaceuticals.Q: How can I find the best way to send money to Mexico during tariff hikes?Use tools like CompareRemit’s comparison platform to evaluate fees, rates, and delivery speeds, and set alerts to transfer money when rates are most favorable.

According to recent data released by the central bank, Mexico received an impressive sum of nearly $5.7 billion in remittances during the month of May, setting a new monthly record. However, analysts caution that the strength of the peso against the dollar may have mitigated this achievement.Since the majority of remittances to Mexico originate from the United States, the value is recorded in dollars. Goldman Sachs analyst Alberto Ramos explains that "a strong peso hurts remittances," referring to the fact that the appreciation of the Mexican currency has an adverse effect on the funds received when converted from dollars to pesos.Interestingly, the peso has emerged as one of the top-performing currencies this year, appreciating over 13% against the U.S. dollar between May 2022 and May of this year.Due to the peso's appreciation, when measured in local currency, remittances actually experienced a 2.2% decline compared to the previous year, as stated by Ramos.Mexican President Andres Manuel Lopez Obrador has consistently highlighted the positive impact of remittances on the country's economy. The funds, primarily originating from the United States, have played a significant role in Mexico's economic growth.In 2022, Mexico recorded a record high of $58.5 billion in remittances from abroad, making it the second-largest recipient country, trailing only behind India.Despite the challenges posed by the "super peso," the dollar value of remittances sent in May increased by nearly 11% compared to the previous year.The latest data for May reveals a substantial jump of almost 14% compared to the previous month, resulting in a total inflow of funds reaching $24.67 billion this year.Notably, this amount surpasses the combined revenue generated by oil and agricultural exports during the same period, as noted by analysts at Mexican brokerage Monex.Analysts at Monex and BBVA attribute part of the May surge to the celebration of Mother's Day, suggesting that around 10% of the increased transactions can be attributed to this commemoration.The number of transactions in May experienced a 7% year-on-year increase, reaching a total of 14.56 million. Furthermore, the average amount per transaction rose by 3% to $391.Goldman Sachs' Ramos emphasizes that the strength of remittances reflects the robust U.S. labor market and visible wage growth, particularly in sectors where Mexican citizens are prominently represented.To compare today's best rates when remitting money to Mexico, use CompareRemit's easy-to-use USD to MXN exchange rate comparison tool!

CompareRemit is thrilled to announce the launch of our NEW Spanish language website! Spanish speakers can now effortlessly navigate through the CompareRemit website to compare exchange rates, fees, and transfer time when looking to send money overseas using one of our trusted partners. Fully understand the offerings of online remittance companies and compare their services with ease while browsing our Spanish-translated site. In addition to making comparisons easier to navigate in Spanish, we have also launched a Spanish blog dedicated to money transfer guides and topics that will help Spanish speakers better understand how to send money online, how to use money transfer apps, reviews of the best remittance companies, and so much more. Plus, we don’t use Google translate for our Spanish-language supported website; our site is translated by native Spanish speakers to ensure that you are receiving accurate and helpful information. How to Navigate the New CompareRemit Spanish Language SiteStarting on the homepage, check out the current exchange rates for top remittance countries, including USD to MXN. These are the best available market exchange rates offered for the moment. You can also manually enter in how much money you are looking to send and to which country, which will redirect you to a new page detailing the company choices you have. You can compare exchange rates, transfer fees, transfer time, and coupons available from our trusted partners. If you are looking for more information on the best ways to send money overseas or tips and tricks when it comes to exchanging or transferring money, be sure to navigate to our blog section. Here, you’ll find detailed articles related to remittance to help make your money transfers easy and seamless. Find detailed money transfer guides, the latest news, and more! To see what offers our current partners have, check out our coupons page. Here, you’ll find the latest deals that our trusted remittance partners are offering. Typically, you’ll be able to get a special exchange rate for your first transfer, or money off your first transaction. Don’t miss these deals, because they don’t last long and help you save even more money when sending cash overseas. Lastly, if you have any questions or concerns while scrolling our site, head to our contact us page where you can send us a message. We will get back to you as soon as possible! We hope that our new Spanish website helps Spanish-speaking visitors to easily navigate the CompareRemit website. Use our website before sending any money overseas to get the best exchange rate, lowest transfer fee, and fastest turnaround time. Compare USD to MXN today!