The House of Representatives of the Mexican Congress passed a controversial bill on December 10th, proposing to impose import tariffs of up to 50% on China and other Asian countries that have not yet signed free trade agreements with Mexico, including India, South Korea, Thailand and Indonesia, from next year.The move is seen by analysts as an attempt by Mexico to cater to U.S. trade policy in response to future reviews of the U.S.-Mexico-Canada Agreement (USMCA).
The auto textile industry bears the brunt
Reuters reported that the bill was passed in the House of Representatives with 281 votes in favor, 24 votes against and 149 abstentions.This bill, which aims to strengthen Mexico's domestic production and solve the serious trade deficit, will impose tariffs on commodities such as automobiles, auto parts, textiles, clothing, plastics and steel.Among them, the tariff rate for most commodities is set at 35%.
The bill was originally proposed in September and will be sent to the Senate for a vote in the next step. It must be passed by the Senate before it can be formally implemented.
Analysis refers to avoiding becoming an "export hub" in order to cater to the United States
Analysts believe that Mexico is promoting tariffs on Asian countries at this time. The main goal is to meet the requirements of the United States and pave the way for the upcoming review of the U.S.-Mexico-Canada Agreement.U.S. Trade Representative Jamieson Greer publicly stated last Thursday that Canada and Mexico should not be used as "export hubs" for Asian countries such as China, suggesting that these North American free trade partners must take measures to restrict the flow of Asian goods into the U.S. market through their borders.
China has always been Mexico's largest source of trade deficits.After the implementation of the new tariffs, it will significantly increase the cost of products from China and other named Asian countries to enter the Mexican market, and encourage Mexican companies to turn to local or North American purchases.
The Chinese and Mexican business circles strongly oppose it
Although the bill was passed in the House of Representatives, it was strongly opposed by China and Mexican domestic business groups before the vote.
The Ministry of Commerce of China has previously issued a statement stating that in the context of the current indiscriminate tariffs imposed by the United States, all countries should jointly oppose various forms of unilateralism and protectionism.China emphasized that no country "must sacrifice the interests of third parties because of coercion by others."Domestic business groups in Mexico are worried that additional tariffs may lead to higher domestic production costs and damage Mexico's position in the global supply chain.