The Senate of Mexico on 10th December passed up to 50 percent of tariffs on imports next year on the goods of China and some other Asian nations, in an attempt to strengthen the local industry against the resistance of business circles.
The proposal that was approved in the lower house will increase or place new tariffs of up to 50 percent by the year 2026 on some of the goods in countries with which the United States has not reached trade agreements, including Mexico, China, India, South Korea, Thailand, and Indonesia. Tariffs will be imposed on most products at up to 35% levels.
The Senate voted on the bill with 76 in favor, 5 against, and 35 abstentions. The version of the bill passed by the Senate is easier than one that had been stuck in the lower house in the fall, with tariffs on approximately 1,400 different line item products – most of its textiles, apparel, steel, auto parts, plastics, and footwear – and the duties on many of them are lower than the original intent of the bill.
CHINA CRITICISES MOVE
On Thursday, the Chinese Ministry of Commerce was responding that it would monitor the new tariff regime in Mexico and consider its consequences, yet added that such actions would amount to considerable sabotage of the interests of trade.
The commerce ministry said, “China has always been against any unilateral increase of tariffs and that it wants Mexico to rectify its unilateralist and protectionist actions as early as possible.”
A spokesperson of the Foreign Affairs Ministry of China replied when questioned at a regular press conference, “it is harmful to others to go against the tide of economic globalisation and do nothing that benefits oneself.”
According to analysts and the private sector, the move is seen to appease the U.S. in the buildup to the next United States-Mexico-Canada trade agreement (USMCA) review and is also intended to bring in more revenue of $3.76 billion next year as Mexico aims to narrow its fiscal deficit.
“On the one hand, it safeguards some of the local productive sectors that are disadvantaged in comparison to the Chinese products. It also shields jobs,” as was said by Mario Vazquez, an opposition (PAN) party senator.
“But, yet, there is one more tax, which people pay when purchasing a product, and this tax is the tariff. And these are the resources that are directed to the state. We would have to know what they are going to be utilized for.” Vazquez said hopefully that the country will strengthen its production chains.
THE US HAS BEEN PRESSURISING LATIN AMERICA TO CURTAIL CHINESE RELATIONS
The measure was defended by Emmanuel Reyes, a senator of the ruling Morena party.
According to Reyes, who is the chairman of the Senate Economy Committee, these changes will increase the supply of Mexican products in the global supply chains and save jobs in major industries.
It is not some kind of tool for raising revenue, but an instrument of influencing economic and trade policy in the general welfare interest, he said.
In September, Mexico had indicated it would increase its tariff on Chinese and other cars from Asian countries. The US has been pressuring the states in Latin America to reduce their economic relations with China, its competitor in the area.
