U.S. tariffs are not just threatening trade. They’re distorting prices, freezing investments, and putting pressure on countries like Mexico, Brazil, and Colombia —where many export-oriented industrial sectors heavily depend on the U.S. market. And when those sectors slow, they don’t just hit exports: they dampen demand for space, inputs, logistics, and jobs.

To date, each country faces different tariff regimes: Mexico is subject to a 25% tariff on steel and aluminum, as well as similar duties on products not certified under the USMCA. Brazil and Colombia, by contrast, face a base tariff of 10% on most of their exports and 25% on steel and aluminum.

The effects are already tangible and follow a pattern: they begin in the most exposed industries, reach physical space, and end up reshaping the production map.

In Mexico, for instance, the automotive sector recorded negative net absorption in Aguascalientes, Mexico City, Monterrey, and Reynosa during Q1 2025: nearly 260,000 square meters of industrial space vacated, one of the worst quarterly starts since 2021, according to SiiLA. In Brazil, steelmaker ArcelorMittal postponed a 4 billion reais (about $800 million) investment in its Tubarão plant, citing the 25% tariff on steel as a key factor. And in Colombia, food company Alpina announced a 90-day commercial pause over the risk of passing on the 10% tariff to U.S. consumers.

Despite these early signs of adjustment, bilateral trade has yet to reflect the impact in aggregate terms. In real terms, U.S. imports from Mexico, Brazil, and Colombia grew 8%, 8%, and 9%, respectively, between Q1 2024 and Q1 2025. And so, although tariffs aim to curb trade flows, they have yet to succeed. But in trade policy, wounds rarely bleed immediately: the true impact ferments in investment decisions, logistics costs, or in the hesitation of a supplier who chooses not to expand.

In Mexico, the exposure is both commercial and territorial. Around 40% of the country’s GDP comes from exports, and nearly a third of that relies on sectors now under tariff pressure —steel, agribusiness, capital goods, electronics, and vehicles and auto parts. That means at least 13% of GDP is directly affected by U.S. protectionism. And that pressure plays out not just in figures but also in real estate. According to SiiLA, these five industries occupy 49.6% of the currently leased industrial inventory in the country, meaning nearly half of the productive space is exposed to any shift in trade conditions.

In Brazil, exposure is lower but more strategic. Just 20% of its GDP comes from exports, and within that, key industrial sectors —such as aerospace, agribusiness, automotive, and steel— already face tariffs. Collectively, their exports to the U.S. represent roughly 2.4% of GDP. And the pressure isn’t just external: it’s spatial. As per SiiLA, these sectors occupy 5.8% of the country’s leased industrial inventory. It may seem like a small share, but it houses high-value-added operations with significant external dependencies and little local substitution capacity.

Colombia, meanwhile, is no exception. There, exposure —though more contained— is also evident. Exports account for about 15% of GDP, and roughly a third of that comes from tariff-sensitive sectors —agribusiness, floriculture, paper, oil, basic chemicals, steel, and textiles. However, based on official trade data and proportional estimates, exports from these sectors to the U.S. amount to nearly 1% of Colombia’s GDP. And in spatial terms, they occupy 12.3% of the country’s leased industrial inventory —still modest, but made up of industries that rely on preferential access, operate with tight margins, and face high regulatory exposure.

Despite their differences in scale, Mexico, Brazil, and Colombia share one critical trait: part of their economies and industrial infrastructure depends on maintaining stable trade relations with the United States. And while that stability still shows up in the data, the cracks are already visible on the ground.

At a macro level, the blow still appears contained. But its potential is far from minor. In all three countries, the sectors under pressure don’t just export—they support logistics chains, industrial employment, and physical inventories that rely on trade stability. In Mexico, the risk is amplified by the size of the market and its role in nearshoring. In Brazil, by the strategic concentration in complex industries. And in Colombia, by the vulnerability of a narrow and exposed export base.

Moreover, the impact isn’t limited to the trade balance: if the industrial real estate markets in Mexico, Brazil, or Colombia face sustained stagnation, the drag could extend to other components of GDP. It’s not a crisis—yet. But if tensions persist, what began as a commercial adjustment could become a deeper economic reshuffling. And when that happens, time lost is not measured in quarters, but in cycles.

What happens in the second half of 2025 will be pivotal. Companies will need to reassess supply chains, costs, and investment decisions under an uncertain horizon. And governments, if they want to safeguard strategic sectors, will have to choose between escalating their response or seeking pragmatic agreements. However, in the absence of clarity, one thing is sure: trade policy is back at the center of the economic game. And Latin America isn’t watching from the sidelines this time —it’s on the board.

Want to learn more about industrial market performance? Do it before it changes. Visit SiiLA REsource or write to contacto@siila.com.mx.