Credit...Jose Luis Gonzalez/Reuters
Mexico Approves 50% Tariffs on Many Chinese Imports
The tariffs will apply to goods from China and other nations. Washington has been pressuring Mexico to move away from dealing with China.
by https://www.nytimes.com/by/jack-nicas, https://www.nytimes.com/by/james-wagner · NY TimesMexico’s Congress authorized up to 50 percent tariffs on Chinese imports on Wednesday, a move seen as an effort to align Mexico with the United States amid pressure from Washington.
On Wednesday morning, Mexico’s lower chamber of Congress approved the tariffs, which apply to China and other countries with which it does not have a trade deal. Mexico’s Senate then passed the bill in an expedited vote on Wednesday night. Seventy-six senators voted in favor versus only five against, while 35 abstained.
President Claudia Sheinbaum, who proposed the tariffs in September, is widely expected to approve the legislation, which would then take effect in January. The tariffs would affect a wide variety of goods, including automotive parts, textiles, furniture, plastics, steel and aluminum.
President Trump has been pressuring other nations to distance themselves from China, and the new Mexican tariffs would represent one of the biggest moves to do so yet.
China is the second largest exporter to Mexico after the United States, selling $130 billion in goods to Mexico last year. (The United States sold $334 billion to Mexico last year.)
Ms. Sheinbaum has denied that the tariffs are to appease Washington. She has said they will help boost Mexico’s domestic manufacturing — a major priority of hers — and close its large trade deficit with China, which buys comparatively little from Mexico.
The Chinese government has strongly denounced the levies. It had warned Mexico to “think twice” and criticized moves made “under coercion to constrain China,” an allusion to Mr. Trump’s pressure.
China’s Ministry of Commerce said in a statement on Thursday that the tariff increases would “substantially harm” it and Mexico’s other trading partners. It urged Mexico to “correct its erroneous practices of unilateralism and protectionism as soon as possible.” The ministry said a trade barrier investigation it initiated in September regarding Mexico is currently underway.
The Trump administration has accused Mexico of being a backdoor for Chinese goods to enter the United States. To try to block that, the White House has put new tariffs on Mexican goods made with Chinese parts. As a result, some Mexican companies this year have shifted supply chains away from China, often with the help of the Mexican government.
In its newly published National Security Strategy, the Trump administration said it was focused on strengthening its grip on the Western Hemisphere, including by keeping powers like China out of the region. “We want other nations to see us as their partner of first choice, and we will (through various means) discourage their collaboration with others,” it said.
Washington has enormous leverage over Mexico. The two countries are each other’s largest trading partners, with $840 billion in trade last year, or seven times Mexico’s trade with China. The Trump administration recently kicked off what could be a contentious process to rework the trade deal between the United States, Canada and Mexico — an agreement Mr. Trump signed into law during his first term but has threatened to scrap.
Mr. Trump has also repeatedly warned that he would like to use military force against drug cartels in Mexico, which Ms. Sheinbaum has said would be unacceptable. He has recently softened his stance as Mexico has increased cooperation on security, immigration and trade.
The new tariff rates would vary depending on the import. They also apply to other countries that Mexico does not have a trade agreement with, including South Korea, Thailand and India. But China is by far the largest exporter affected.
Alejandra Barrales, a Mexican senator whose party opposes Ms. Sheinbaum, raised concerns about the tariffs and their potential to increase prices for Mexicans, particularly in the automotive industry.
She said that Mexico was caught in the middle of a dispute between the world’s two largest economies: the United States and China.
“With this tariff proposal, Mexico will be defining who it is going to play with and it will be taking sides in a dispute that doesn’t seem simple at all,” she said before the proposal was approved.