【By Observer News, Qi Qian】

Mexico plans to impose a 50% tariff on imports from China and other countries; China initiated a trade investigation against Mexico in late September.

According to Bloomberg news on November 11, Mexico's plan to tax China has been postponed again, with the plan to be debated in Congress as early as December.

The report said that opposition from business leaders in Mexico and within the ruling party is growing, hindering the Congress from debating the tariff plan. After the Sinbaum government submitted the proposal to the House of Representatives in early September, it had already been postponed once, scheduled for review by the end of November.

A manufacturing official involved in government negotiations said that this move would further undermine industrial competitiveness at a time when various industries are already under pressure from rising costs. Mexican manufacturers warned that they heavily rely on imported machinery, components, and raw materials from China.

Within the ruling coalition led by the National Regeneration Movement Party under Sinbaum's leadership, some legislators have also expressed concerns, believing that now is not the time to provoke a trade dispute with China. Although many legislators support Sinbaum's efforts to protect domestic industries and strengthen ties with the United States, others emphasized that the country needs to maintain trade relations with major partners like China and maintain trade diversification.

According to reports, despite the majority seats held by the National Regeneration Movement Party, the proposal still faces difficulties in advancing. The current legislative session will end on December 15, and legislators believe that the government's water and health initiatives should be prioritized. If not addressed this year, the debate will be pushed to February next year.

President of Mexico, Sinbaum, Visual China

In September, the Mexican government announced that it planned to increase tariffs on key import goods from "countries with which it has not signed a trade agreement" to boost domestic industries and reduce reliance on Asian imports. According to the draft, over 1,400 product categories were affected, including auto parts imported. Analysts pointed out that the tariff rate on imported cars would be raised to as high as 50%.

Mexican officials insisted that the move aims to protect Mexican producers from so-called "unfair competition." However, the media generally believed that Mexico was yielding to U.S. pressure and viewing this measure as a bargaining chip before the review of the USMCA.

Fernando Castro Trenti, a member of the Finance Committee of the Mexican House of Representatives and a legislator of the National Regeneration Movement Party, said in a telephone interview: "The government is reviewing our trade relationship with countries with which we have not signed a free trade agreement. Our goal is not to close the door, but to rebalance trade relations and ensure fair conditions for Mexican industries."

Bloomberg reported that the Sinbaum office refused to comment on the delay, stating that any statement would be made at the daily morning press conference.

December 2, 2023, at the Jiangsu Lianyungang Port Eastern Port Company wharf, a ro-ro ship is berthed at berth 59 to load cars exported to Mexico. Visual China

However, the tariff plan by Sinbaum has not yet been finalized, and has already caused widespread doubts domestically.

Aside from manufacturers worrying about rising costs, the tariff plan also faces technical challenges. According to informed officials, discussions are still ongoing about which categories should be targeted to reduce the impact on local industries. However, there is a disagreement between the Ministry of Finance and the Ministry of Economy on this issue, and Mexican companies themselves have not presented a unified opposition proposal, further slowing down progress.

Some members of the ruling coalition remain optimistic about passing the proposal by December this year.

But other legislators believe that even if the plan can protect part of the local industry, it will harm Mexican companies that rely on Chinese raw materials. Kenneth Smith, the chief technical trade negotiator for the USMCA of Mexico, described the tariff plan as a "shotgun approach," criticizing the government for "putting many countries and businesses in the crossfire."

In late September, the Ministry of Commerce launched a trade and investment barrier investigation according to relevant provisions of the "Foreign Trade Law" and the "Regulations on Foreign Trade Barrier Investigations" regarding Mexico's planned increase in import tariffs and other trade and investment restrictions. The Ministry of Commerce stated that China will take all necessary measures, including in the fields of trade and investment, to resolutely safeguard the legitimate rights and interests of enterprises based on the investigation results and actual circumstances.

The spokesperson for the Ministry of Commerce stated that China believes that in the current context of the U.S. arbitrarily imposing tariffs, all countries should jointly oppose various forms of unilateralism and protectionism, and must not sacrifice the interests of third parties due to others' coercion.

The spokesperson pointed out that if Mexico's unilateral tariff measures are implemented, even within the WTO framework, it will damage the interests of relevant trade partners, including China, and will significantly affect the certainty of Mexico's business environment, reducing enterprise confidence in investing in Mexico. China firmly opposes this.

This article is an exclusive article of Observer News, and unauthorized reproduction is prohibited.

Original: https://www.toutiao.com/article/7571288113729782308/

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