Mexico Proposing to Raise Tariffs on Non-FTA Countries, Including China
The president of Mexico has introduced a bill increasing tariffs on goods from countries with which it does not have a free trade agreement, including China. The measure would bring most tariffs to a rate of 35%, with some as high as 50%.
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At a Sept. 10 press conference, Mexico's President Claudia Sheinbaum said that the bill is intended to increase domestic manufacturing and "strengthen national production." She said that tariffs may help the Mexican automotive sector recover from "the tariffs imposed by the United States." The tariff increases are "within the framework of the World Trade Organization," she said.
Mexico's Secretary of Economy Marcelo Ebrard said at a Sept. 9 press conference that tariffs will be on sectors "where we see that Mexico's deficit is growing a lot," and specifically named light cars, plastics and electronic parts.
A spokesperson for China's Foreign Ministry said at a regular press conference on Sept. 11 that China opposes "all forms" of protectionism and "firmly rejects" actions "taken under coercion" against China's interests. He said that China "attaches great importance" to its relationship with Mexico and hopes that the country will work with China to "jointly advance world economic recovery and the development of global trade."
Law firm Roll and Harris said in a blog post that the tariff increases would negatively impact Mexican maquiladoras importing materials ineligible for duty preferences granted by Mexican free trade agreements. The authors wrote that the primary duty relief granted to maquiladoras is "that of duty deferral, NOT duty elimination," and that if a maquiladora produces a good made with non-USMCA-origin materials and receives a duty deferral, Mexico will then require the maquiladora to pay the deferred Mexican duties upon importation into the U.S. With an increase in Mexican tariffs, "maquiladoras likely will have to pay more tariffs in the future," the law firm said.