Imposing high tariffs on China? The opposition in Mexico is growing stronger and stronger

Bloomberg reported on the 10th, citing informed sources, that Mexico's plan to impose high tariffs on China has been postponed again and will be reviewed in Congress as early as December. It is reported that the growing opposition from Mexican business leaders and within the ruling party is hindering the congressional debate on the tariff plan. According to public media reports, after the Mexican government submitted the proposal to the House of Representatives in early September, the plan has been postponed once and was originally scheduled for review at the end of November. Chinese Foreign Ministry spokesperson Lin Jian responded on the 11th that China firmly opposes imposing restrictions on China under various pretexts under the coercion of others, which harms China's legitimate interests. We will resolutely safeguard our own rights and interests based on the actual situation. Lin Jian said that China attaches great importance to the development of China Mexico relations. Against the backdrop of some countries imposing excessive tariffs, China and Mexico should strengthen communication and coordination, jointly safeguard free trade and multilateralism, and jointly promote world economic recovery and global trade development.

The Mexican manufacturing industry has warned that the proposed tariffs will significantly increase production costs, as the Mexican manufacturing industry heavily relies on imports from China for machinery, components, and raw materials. Bloomberg quoted a manufacturing industry insider involved in government negotiations as saying that this move will further undermine industry competitiveness as various industries are already facing pressure from rising costs.

Outside the corporate world, there are also some concerns within the ruling coalition led by President Simbaum and led by the National Renaissance Movement Party. Bloomberg reported that some lawmakers believe that now is not the appropriate time to provoke trade frictions with China. Although many lawmakers support protecting their own industries and strengthening relations with the United States, others emphasize the need for the country to maintain trade relations and diversify its trade with major partners such as China.

According to previous reports from Mexican media, the Mexican government submitted a proposal to Congress on September 10th to impose tariffs of up to 50% on automobiles, parts, steel, and textiles from China and other countries without trade agreements with Mexico. At present, Mexico's tariff on imported vehicles from China is about 20%. The Mexican Ministry of Economy stated that this move aims to "protect national industries". But analysts believe that this move is also aimed at appeasing the United States - the current US government has repeatedly urged trading partners to increase tariffs on China. At the end of September, the Chinese Ministry of Commerce launched a trade and investment barrier investigation into Mexico's proposed increase in import tariffs and other trade and investment restrictions against China, in accordance with relevant provisions of the Foreign Trade Law and the Rules for Investigation of Foreign Trade Barriers.

Bloomberg reported on the 11th that although the National Renaissance Movement Party holds a majority of seats in Congress, the relevant proposals are still difficult to advance. The current legislative session will end on December 15th, and lawmakers believe that priority should be given to the water and health initiatives proposed by the government. If the proposal is not reviewed this year, the relevant debate will be postponed to February next year.

The report cites the views of some lawmakers who believe that even if the plan can protect some local industries, it will harm Mexican companies that rely on Chinese raw materials. Kenneth Smith, Mexico's chief technical trade negotiator for the USMCA, described the tariff plan as a "shotgun" approach at a recent economic forum, stating that "it will put many countries and businesses in a crossfire.

The relevant tariff plan also faces technical difficulties. Bloomberg quoted insiders as saying that there are differences between the Mexican Ministry of Finance and the Ministry of Economy on which scope and categories of goods should be taxed, which makes the negotiations between the government and the private sector more complex, and various industries in Mexico have different opinions, making it difficult to form a unified opinion, further slowing down progress.

The measure of imposing tariffs on Chinese footwear will harm the poorest population in Mexico. "Mexico's" Millennium Report "previously cited an example in a report, stating that if anti-dumping duties were imposed on all footwear products imported from China with prices below $22.58, it would not only severely damage the distributors of related goods, but also seriously affect 38.5 million people living in poverty in Mexico, who already have difficulty purchasing high-quality and affordable footwear products.

Castro, the president of the Mexican Chamber of Importers and Exporters, said that once tariffs are imposed according to the proposal of the Ministry of Economy, import costs and operating costs of international trade service providers will increase by 30%, and prices of some products may rise by 100%, which will ultimately have an impact on consumers. Castro stated that decisions that may affect the international trade ecosystem should not be made hastily overnight, and the government should incorporate more planning into their decisions.