Potential China tariffs may inadvertently harm Mexican industries, cautions the chamber
Mexico is contemplating the implementation of tariffs on over 1,300 products, including vehicles, apparel, electronics, and parts for motorcycles and automobiles, as part of an effort to protect and develop key technological sectors within the Mexican market.
The proposed tariffs, which range from 10% to 50%, have been put forth by Mexican President Claudia Sheinbaum. Sheinbaum emphasizes that the tariffs are not targeted at China and are not a result of U.S. pressure. However, China has expressed concern and urged Mexico to reconsider the proposed measures.
The Mexico-China Chamber of Commerce and Technology (MEXCHAM) has voiced concerns about the potential negative consequences of introducing high tariffs on Chinese imports. MEXCHAM warns that such tariffs could cancel the possibility of absorbing, consolidating, and developing technology in the Mexican market for key sectors. This, in turn, could drive inflation, potentially affecting the remunerative capacity of the minimum wage in Mexico.
Moreover, MEXCHAM predicts that the tariffs could lead to inflationary and manufacturing cost pressures due to Mexico's dependence on Chinese inputs. If implemented, these tariffs could threaten at least six key industries: automotive, electronics, pharmaceuticals, chemicals, telecommunications, and clean energy. Many of these industries' inputs are not manufactured elsewhere in the Americas, making them particularly vulnerable.
Sheinbaum, however, seeks to protect Mexico's domestic industry through these proposed tariffs, while avoiding any conflict with China. MEXCHAM, on the other hand, calls for a reconsideration of the proposed tariffs and suggests a need for a "very clear" analysis of Mexico's options for replacing high-tech imports in the immediate future.
In a statement, a spokesperson for the Chinese Commerce Ministry stated that any unilateral tariff increase by Mexico would be seen as appeasement and compromise toward unilateral bullying. MEXCHAM also warns of potential retaliatory tariffs from China on Mexican goods, such as copper ore.
It's worth noting that in the first six months of 2025, Mexico attracted US $3 billion in new foreign direct investment. The inflation rate in August was 3.57%. If the tariffs are implemented, Mexico may lose competitiveness in sectors with high substitutability in China.
This development comes as a significant geopolitical move, with potential implications for the economic relationships between Mexico, China, and other global trade partners. The situation is being closely monitored by various international organisations and businesses.
Read also:
- United States tariffs pose a threat to India, necessitating the recruitment of adept negotiators or strategists, similar to those who had influenced Trump's decisions.
- Weekly happenings in the German Federal Parliament (Bundestag)
- Southwest region's most popular posts, accompanied by an inquiry:
- Discussion between Putin and Trump in Alaska could potentially overshadow Ukraine's concerns
