Mexico City, Sept 10 (Reuters) – Mexico said on Wednesday it would raise tariffs on cars from China and other Asian countries to 50 percent. The government said the sweeping overhaul of import tariffs would protect jobs, while analysts said the move was aimed at appeasing the United States.
The Economy Ministry said the move would raise tariffs to varying degrees on goods across multiple sectors, including textiles, steel, and automobiles, affecting imports worth $52 billion.
“They have already imposed tariffs,” Economy Minister Marcelo Ebrard told reporters when asked about China’s import duty on automobiles (currently 20%). “We will raise our tariffs to the maximum level permitted.”
“Without a certain level of protection, you can hardly compete,” he added.
Ebrard stated these measures align precisely with World Trade Organization restrictions, aiming to protect Mexican jobs as Chinese vehicles enter the Mexican market at prices “below what we call the reference price.”
China’s Foreign Ministry said Thursday that China firmly opposes coercion by other countries and restrictions imposed under “various pretexts,” adding that China hopes Mexico will work with China to promote global economic recovery and trade development.
Foreign Ministry Spokesperson Lin Jian told reporters at a regular press conference: “We will resolutely safeguard our legitimate rights and interests based on the actual situation.”
The plan still requires congressional approval, where the government holds an absolute majority.
The Ministry of Economy stated in a document that tariffs would impact countries without trade agreements with Mexico, particularly China, South Korea, India, Indonesia, Russia, Thailand, and Turkey.
The document indicated the plan would affect 8.6% of imports and protect 325,000 at-risk industrial and manufacturing jobs.
We will resolutely defend our legitimate rights and interests based on the actual situation.”
The plan still requires congressional approval, where the government holds an absolute majority.
The Ministry of Economy stated in a document that the tariffs would affect countries without trade agreements with Mexico, particularly China, South Korea, India, Indonesia, Russia, Thailand, and Turkey.
The document indicated the plan would impact 8.6% of imports and protect 325,000 at-risk industrial and manufacturing jobs.
These measures also include imposing 35% tariffs on steel, toys, and motorcycles. Tariffs on textiles will range from 10% to 50%.
Currently, the United States is urging Latin American nations to limit their economic ties with China as the U.S. and China vie for influence in the region.
“The United States will not allow China to use Mexico as a backdoor,” said Mariana Campello of the Center for Strategic and International Studies’ Americas Program, adding that Mexico’s trade deficit with China has doubled over the past decade, reaching $120 billion last year.
Earlier this year, Ebrard opposed the tariff measures, stating they would hinder economic growth and stifle inflation.
Responding to U.S. Pressure
Gabriela Siller, an analyst at Banco BASE, stated that tariffs could temporarily boost demand for Chinese vehicles.
She noted on social media: “Imposing tariffs on countries without trade agreements with Mexico serves two purposes. First, to increase revenue; second, to curry favor with Trump.”
John Price, Managing Director at Americas Market Intelligence, noted that Mexico exports a significant volume of vehicles to the U.S. and is navigating American pressure while safeguarding its own economy.
Following the Mexican government’s announcement of an additional $3.76 billion in tariff revenue next year, he remarked: “The Mexicans are trying to appease the Americans while also protecting the industrial policies that have worked for them over the past 30 years.”
The United States and Mexico have signed a free trade agreement with Canada, making each other’s largest trading partners. The agreement shields Mexico from most tariffs imposed by the administration of U.S. President Donald Trump and is scheduled for review next year.
