Mexico is considering introducing tax credits for foreign companies to encourage investment and production in the country. A senior Mexican trade official said the proposed incentives would focus on sectors such as electric vehicles (EVs), semiconductors, rare earth minerals, batteries and electronics.
The initiative by Mexico’s new government is part of efforts to stimulate investment as companies look to move supply chains closer to major markets. The strategy comes amid rising protectionism in the United States on the eve of the presidential election.
Foreign Trade Undersecretary Luis Rosendo said in a recent interview that Mexico is “seriously analyzing the creation of a tax credit incentive program very similar to the United States and Canada.” Rosendo believes these programs could be a big draw for companies to expand into Mexico, noting that the incentives are available to companies from any country, including China.
Internal government documents show that Mexico has begun negotiations with multiple international companies, including Foxconn, Intel (NASDAQ:), General Motors (NYSE:), DHL, and Stellantis (NYSE:STLA), to sell their products in Mexico. The company announced that it is exploring manufacturing opportunities. Currently imported from Asia. However, Rosendo did not provide additional details about the companies mentioned in the document.
The outreach to Chinese automakers signals a possible shift from the stance of the previous administration, which reportedly decided not to provide local incentives to Chinese automakers in the face of pressure from the United States. . The U.S. Embassy in Mexico has not commented on the matter.
Mexico’s new President Claudia Sheinbaum’s administration is also reviewing U.S. and Ottawa policies toward China, with the aim of aligning Washington and Ottawa with addressing China’s alleged unfair trade practices. There is. This adjustment was made in anticipation of the upcoming review of the USMCA North American Trade Agreement. Using steel imports as an example, Rosendo mentioned efforts to counter U.S. tariff evasion on Chinese steel coming in through Mexico.
Rosendo said that although Mexico prioritizes its strategic alliance with the United States and Canada through USMCA, it has no intention of “breaking up with China” or refusing Chinese investment. The balanced stance comes as Republican presidential candidate Donald Trump threatens to impose tariffs to block Chinese automakers from exporting cars from Mexico to the United States. The presidential election, which resulted in a tie between Trump and Democratic candidate Kamala Harris, is expected to have an impact on future trade trends.
Rosendo stressed that Mexico is ready to work with both the Trump and Harris administrations and emphasized the importance of Mexico’s sovereignty in trade negotiations. President Sheinbaum and his cabinet have sought to reassure international investors about Mexico’s stability, especially in the wake of controversial judicial reforms that have spooked markets and hurt the peso.
Despite the economic uncertainty, Rosendo confirmed that no company has withdrawn investment from Mexico, saying, “Honestly, I have not heard of a single company that has withdrawn because of fear of investing in Mexico.” “I’ve never done that before.” This signals continued confidence in Mexico as a destination for international business.
Reuters contributed to this article.
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