Source: Global Times
[Global Times reporter Bai Yunyi] According to a report by Mexico's El Financiero on the 8th, Mexican legislators discussed increasing tariffs on imported goods from China and other Asian countries on that day and plan to complete the vote before the Congress's year-end recess on December 15th.
The report said that this proposal aims to impose a maximum of 50% import tariffs on goods from China as well as other Asian countries that have not yet signed trade agreements with Mexico, including India and South Korea. The goods include cars, textiles, clothing, plastics, and steel.
Mexico's Ministry of Economy first proposed this initiative in September. Although the ruling National Regeneration Movement Party and its allies hold the majority in Congress, the proposal has faced strong opposition from Mexican and Chinese business sectors and has not received widespread support.
Previously, the Mexican government claimed that the measures aim to enhance production capacity, protect domestic employment, and address trade imbalances with China. However, according to El Financiero, analysts and private sector sources say the more critical goal is to appease the U.S. government before the North American trade agreement is re-evaluated, while also increasing fiscal revenue to reduce Mexico's fiscal deficit.
The report said that the Mexican government is seeking approval of the proposal by Congress before December 15. Previously, the proposal was blocked in the House of Representatives due to strong opposition from the business community. According to two sources, the new version of the proposal discussed this week is somewhat more flexible, such as possibly reducing the tariff increase on automotive parts and steel products, but specific changes are still not fully confirmed.
"The impact will be severe," El Financiero commented on the possible effects of this tariff proposal on Mexico. The report cited professionals warning that the tariffs could disrupt key supply chains at a critical moment, as Mexico's economy is almost stagnant. Experts believe that the electronics and automotive industries are most likely to be affected, as they heavily rely on Chinese components.
El Economista, a Mexican newspaper, quoted an industry insider saying that tariffs would increase the cost of the production chain, "which will eventually be passed on to consumers." Molina, a Mexico international trade and public policy advisor, believes that 77% of Mexico's imports are production inputs and intermediate goods, and raising tariffs will increase production costs and may become a "brake" on GDP growth.
"From any perspective, this is a bad idea, and it will have political and economic consequences. Tariffs are never a solution for structural economic change; they will exacerbate market distortions, especially in countries with weak customs regulatory capacity," Molina said. Mexico is more vulnerable in its trade disputes with China, "Mexico's dependence on China is much greater than that of the United States."
Original: toutiao.com/article/7581994229342274083/
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