Mexico will respond with tariffs against the United States if Trump steps up his protectionist policies and follows through on his threat to impose 25% tariffs on all products from Mexico and Canada. The country’s president, Claudia Sheinbaum, suggested Tuesday that she would take “retaliation.”
The president-elect posted Monday evening on his social media profile Truth Social that he would impose tariffs of 25% on all imports from Mexico and Canada, and that he would increase tariffs by 10%. % on all imports from China. During the campaign, the president-elect promised a universal tariff of 10% for the whole world and another of 60% only for China.
“On January 20, as one of my many first executive orders, I will sign all necessary documents to impose on Mexico and Canada a 25% tariff on ALL products entering the United States and their products. ridiculously open borders,” he said.
The Mexican leader sent a letter to Trump to assure him that this protectionist stance will only harm shared companies located on Mexican territory, the result of what is called “near-shoring” or nearby production.
“After one tariff, another will come in response, and so on until we endanger the joint ventures,” the president said, recalling that all major American automakers are located on the other side of the border and benefit from the treaty. free trade that exists between Mexico, Canada and the United States.
The president-elect maintained that the goal was to end crime and drug trafficking, as he believes that the majority of drugs used in the United States, including fentanyl, They come from the southern borderto which the response from her Mexican counterpart was as follows: “The phenomenon of migration or drug consumption in the United States will not face threats or tariffs,” she wrote in her letter.
“This tariff will remain in effect until drugs, especially fentanyl, and all illegal immigrants end this invasion of our country!” Mexico and Canada have the absolute right and power to easily resolve this long-standing problem. We demand “Let them use this power and in the meantime, it is time for them to pay a very high price!”, he exclaimed.
Sheinbaum, for his part, reaffirmed that these tariff barriers imposed on businesses “are not acceptable and would cause inflation and unemployment,” both in the United States and Mexico.
Trump reiterated in his post that “thousands of people” are arriving in his country from Mexico and Canada “increasing crime and drugs to levels never seen before.”
Faced with these statements, the Prime Minister of Canada, Justin Trudeau, called the president-elect, Donald Trump, and assured that they had had a “good” exchange of views on trade and borders. “We talked about the internal and fruitful ties between our countries,” as well as “the challenges we can work on together,” Trudeau added.
But this move by Trump appears to have a lot to do with his obsession with stopping China. As elEconomista.es published at the time, Chinese companies are taking advantage of the free trade agreement between the United States, Mexico and Canada to introduce their products to the North American market and thus avoid customs tariffs that the Republican imposed in 2017 and that Joe Biden imposed. remained in office.
The key to all this is in Monterrey, more precisely in the Hofusan Industrial Park. This industrial center covers 850 hectares and it is the haven for many Chinese manufacturers seeking to avoid U.S. tariffs and shorten the increasingly strained supply chain due to the global geopolitical situation.
More than 10 Chinese companies have factories in this industrial hub and the managers of this park have assured that within two years they hope to have 35 additional companies based there, 10% of which will be run by Chinese.
When Donald Trump took office and the trade “Cold War” began, Chinese investments in Mexico soared by $154 million in 2017 to 271 million the following year.
In 2023, the value of exports of Chinese components manufactured in Mexico to the United States closed at $1 billion, 15% more than the previous year, according to a report published by the National Association of the Components Industry of Mexico.
Musk and Tesla would be harmed
Tesla’s recent announcement to set up a gigafactory in the suburbs of Monterrey has attracted Chinese component makers to the region to supply parts to the electric vehicle maker. This set off alarm bells in Washington.
What Musk had in mind was to replicate the local sourcing model he had in mind. the Tesla factory in Shanghai. The plan is to build the world’s cheapest next-generation electric car model at its Nuevo León facility, thanks in part to $153 million in incentives from local Mexican governments.
Electric vehicles with Mexican-made parts mean up to $7,500 in tax cuts on Americans’ education credits in 2022, according to the Inflation Reduction Act, America’s main climate change measure. the Biden administration, which is rather interventionist.
China’s response
For its part, China reacted in a rather diplomatic manner to Trump’s announcement. This Tuesday, the spokesperson for the Chinese embassy in the United States, Liu Pengyu, assured on his official account of the social network who reiterated that “no one will win a trade or tariff war”.
“I have had numerous conversations with China regarding the enormous quantities of drugs, including fentanyl, being shipped to the United States, but without success,” wrote the American president-elect. He reiterated that Beijing had promised to impose “the maximum penalty”, death, for any drug trafficker “Drugs are entering our country, primarily through Mexico, at levels never seen before,” Trump added.
The Chinese diplomat asserted that “the idea that China knowingly allows fentanyl precursors into the United States is completely contrary to facts and reality.”
In this sense, he reported that the anti-drug agencies of China and the United States “have resumed regular communication” since the meeting between the presidents of the two countries, Xi Jinping and Joe Biden, in San Francisco in November of last year.
