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Trump wants to see Mexico close its doors to Chinese automakers who might export to the US.
Donald Trump has threatened machinery giant Deere & Co. with tariffs if it moves a plant to Mexico, potentially throwing a wrench into the “nearshoring” process that has promised to bring millions of investment dollars to Mexico.
Marcelo Ebrard, who was foreign minister during Trump’s first term and will lead the USMCA review, has argued that it would be a lose-lose situation, saying that tariffs will hurt US companies operating in Mexico, especially in the auto industry.
Automaker Honda said that new tariffs on cars imported into the US from Mexico could impact the delivery of thousands of vehicles, while billionaire Trump adviser Elon Musk has said he’s holding off on building his new Tesla Inc. plant in Mexico.
It’s a development that’s not bypassed Beijing, with an op-ed in the state-backed Global Times touting the “vast” potential for economic cooperation between China and Mexico. “If US politicians continue to place pressure on Mexico and try to undermine normal economic cooperation, it will certainly harm Mexico’s economic potential,” it said in October.
Officials in Sheinbaum’s cabinet have tried to remind Trump that the USMCA was a good deal for him, too. After all, he signed it into law himself in 2020 but knowing Donald Trump, he wants to have the last word on bilateral trade and economic matters.
The last time Trump threatened tariffs, in 2019, Mexico readily agreed to a crackdown on migration. This year, its convoluted plan to apprehend and bus migrants to southern Mexican states has helped bring US-Mexico border crossings down by about 76% since December, according to data from the Mexican government. In April, it put tariffs on a host of goods from China, partly in response to US concerns about the “dumping” of reduced-cost steel.
That leaves Mexico figuring out how much further to go to appease its irritable neighbor. Chinese companies, too, have continued to set up shop in Mexico. Electric vehicle maker BYD Co. said this month it’s evaluating locations in Mexico for a plant to serve the Latin American market, and other Chinese suppliers have set up industrial parks near the US border.
TYT Newsroom