Mexican lawmakers on Wednesday backed a measure to raise tariffs on goods from China and other countries that have no trade agreement with Mexico, a move Beijing said would harm its interests.
The bill was spearheaded by Mexican President Claudia Sheinbaum and approved by the Mexican Senate 76-5 on Wednesday night.
It increases tariffs on imports of automobiles, textiles, clothing, plastics, appliances and other products — primarily affecting Chinese goods. The change would also affect Taiwan, South Korea, India, Indonesia, Russia, Thailand, Turkey and Brazil.
Photo: EPA
Sheinbaum must now ratify the tariffs, expected to take effect on Jan. 1 next year.
The proposed tariff rates had been lowered to 20 percent or 35 percent from an initial suggestion of 50 percent for most categories of goods. The 50 percent rate would still apply in some cases.
The Mexican Ministry of Finance estimates the new tariffs would raise nearly 52 billion pesos (US$2.9 billion) in extra revenue next year.
Sheinbaum’s embrace of the tariffs track with US concerns regarding so-called transshipment of Chinese exports through other countries, and follow action by Canada last year to emulate US levies on electric cars, steel and aluminum from China.
The legislation states Chinese cars would face among the steepest tariffs at 50 percent. The country’s massive auto sector holds 20 percent of the Mexican market, up dramatically from minimal vehicle imports just six years ago.
Mexican officials and local auto associations backed the import levies in a bid to protect national vehicle production, a major driver of Mexico’s manufacturing sector.
The move would “substantially harm the interests of relevant trading partners, including China,” Beijing said yesterday.
China “hopes Mexico will promptly rectify this erroneous practice of unilateralism and protectionism,” a Chinese Ministry of Commerce spokesperson said.
The ministry also mentioned an ongoing trade barrier investigation China launched against Mexico in September, suggesting the possibility of retaliation.
Beijing has previously said it opposes any “coercion” to impose restrictions on its exports and urged Mexico to “act with prudence.”
China runs a substantial trade surplus with Mexico.
Last year, it exported US$71 billion more than it imported, China’s customs data showed. While copper ore and concentrates could be a potential target if China decided to retaliate, Mexico would likely be able to find other customers, given strong demand for the metal essential for the renewable energy industry.
Additional reporting by Bloomberg
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