Leopard 8 is one of the Fang Cheng Bao brands of Three Cars Byd, announced at Deep Shenzhen on April 16, 2024.
CNBC | Evelyn Cheng
BEIJING – China’s Commerce Ministry plans to raise tariffs on Asian-made cars to 50%, so Mexico warns its measures.
We hope that Mexico is extremely cautious and thinks well before acting,” the department said in a statement late Thursday.
“China and Mexico are mutually important trading partners,” the ministry said. “We don’t want to see economic cooperation from both parties affected by this situation.”
Mexico’s economy secretary Marcelo Ebrard told reporters Wednesday that the country plans to raise tariffs on vehicles from Asia, particularly China, from the current 20% to 50%. The increase in obligations still requires Congressional approval, and the tariffs will take effect in 30 days, he said.
“China will take necessary measures… to firmly protect its legitimate rights and interests,” the Chinese statement read.
In the ongoing trade tensions with the US, China’s measures include restrictions on exporting minerals essential to the production of automobiles and other advanced technologies. Chinese companies have come to control the supply chain due to many of these minerals.
Sitting on the US southern border, Mexico benefits from the US-Mexico-Canada Agreement (USMCA) for tariff-free trade in countries. However, the USMCA, which came into effect in 2020, requires that a much larger portion of the vehicle be made in the region than the North American free trade agreement it replaced.
The Mexican automotive industry previously told CNBC that it is a partner at DC Global Advisors, based in Jorge Guajardo, Washington, the country’s largest employer. He is a former ambassador to Mexico.
From June 2022 to July 2024, more than 20 Chinese auto parts and manufacturers announced more than $7 billion in investments in Mexico, according to the prosperous American Union, advocacy group.
It is unknown how many projects have been completed. Chinese electric vehicle giant BYD has yet to build its long-awaited factory, particularly in Mexico.
According to figures from China’s Passenger Automobile Association earlier this year, the Central American country was a destination for Chinese automobile exports.
“What’s very important about Chinese cars is where they’re taking market share, it’s not actually from Western brands. It’s really from other Asian brands. It’s Eugene Fuciao, Macquarie Capital, the head of China’s equity strategy, as seen in Mexico.”
However, even suggesting that the job duties at the time increased by 25%, Hsiao said he expects “I think the value proposition for many of these Chinese cars will remain intact even for some of these tariffs.”
