US asks Mexico to review labor rights at Industrias FG plant
Washington invoked the USMCA labor mechanism against a plant in Morelos and froze the final tariff accounting on its exports to the United States.
The United States has asked Mexico to review whether workers at an Industrias FG plant in Morelos are being denied the right to organize and bargain collectively. The Office of the U.S. Trade Representative (USTR) invoked the USMCA's Rapid Response Labor Mechanism on Friday, a tool that targets a single factory rather than a whole sector. Mexico calls the trade pact the T-MEC.
The request grew out of a petition filed Oct. 13 by the Ricardo Flores Magón national union of industrial and service workers with a U.S. interagency labor committee. After reviewing it, the committee found "sufficient and credible" evidence to take the matter to Mexico.
The allegations come from the union. The USTR cites them as the basis for its request, not as proven facts:
- Pressure on workers to back a union chosen by the company.
- A refusal to bargain with the authorized union.
- Firings and discrimination over union activity.
- Interrogations, harassment, threats and disinformation.
The plant makes polyurethane hydraulic seals, parts used in machinery with pistons. The USTR also directed the Treasury Department to suspend liquidation of the plant's goods that have not yet been finalized. Until liquidation happens, U.S. customs has not closed the final tariff calculation, so those imports remain open to adjustment if the case ends in penalties.
Mexico has 10 days to agree to the review. If it does, it will have 45 days to finish it.
The case is not an outlier. The USTR keeps a running list of the facilities it has flagged in Mexico. It sought a review at Industrias Tecnos in Cuernavaca, Morelos, in June 2024 and asked for a dispute settlement panel that December. It announced the resolution of the Alimentos Grole case, in Ciudad Obregón, Sonora, on Oct. 19, and opened another, at Madobox in Uruapan, Michoacán, on Nov. 2.
For the plant's workers, the request opens a formal Mexican government review of their union rights. For the company and its U.S. customers, tariff uncertainty will last as long as the case does.
